SWINDON-headquartered Npower has come under fire from the Government and energy regulator after announcing plans to hike gas and electricity prices by 9.8 per cent - a move that will add £109 to annual dual fuel bills.

The Big Six energy firm said the move, which will affect 1.4 million customers on a standard variable tariff, comes in the face of rising wholesale energy costs and will come into effect on March 16. Simon Stacey, managing director of npower’s domestic markets, said it was a “hugely difficult decision”.

But energy regulator Ofgem rebuked Npower, saying it does not see “any case” for significant price increases where suppliers have bought energy in advance, and demanded the firm justify the decision to its customers.

Mr Stacey insisted npower “delayed the date this takes effect until after the coldest months of the year” and said that its most vulnerable customers will not be impacted until May.

Theresa May’s spokesman said the Government was “concerned” about the move.

“Suppliers are protected from the recent fluctuations in the wholesale energy prices in which they are buying up to two years in advance," he said.

“So we expect energy companies to treat their customers fairly, and are being clear that where markets aren’t working we are prepared to act.”

Npower’s price hike on typical dual fuel annual energy bills is made up of an average increase of 4.8 per cent on gas and 15 per cent on electricity. The firm said another 1.4 million fixed rate and pre-payment customers will not be affected by the increase.

“Since Npower last raised its prices three years ago, there have been increases in wholesale energy costs and rises in the cost of delivering Government policies, such as smart metering, renewables obligation and the capacity market. This trend is set to continue,” the firm said.

The move comes after rival EDF hiked prices in December.

Experts believe the company’s decision could be a precursor to other energy providers ramping up prices.