MILLIONS OF households could be hit by 15% price hikes in their energy bills next year, which could lead to the return of average bills in excess of £1000, experts warn. British Gas and nPower have already announced price increases on their tracker tariffs, stoking fears that further price rises could be on the way from other suppliers in the new year.

Customers on nPower's tracker deal face increases of 17% for gas and 13% for electricity, starting on January 1. The price hikes will add £87 a year to the average gas bill and £44 to the typical cost of electricity.

British Gas, the UK's biggest energy supplier, has already put up prices for its tracker customers, by 13% for gas and 15% for electricity.

Tracker tariffs follow wholesale power prices up and down, but experts warn that the recent changes give the green light for hikes across other tariffs too.

Karen Darby of SimplySwitch, the price comparison and switching service, says: "Historically, when one of the big suppliers increase prices, the others are quick to follow. Many analysts are now predicting price rises across all tariffs of about 15% early in 2008.

"If this happens, customers will be forced to pay an extra £131 per year in energy bills. With petrol prices rising, the cost of mortgages still high and the inevitable financial hangover from Christmas, householders will really feel the pinch early in the new year."

A price hike of 10% would push an estimated 400,000 more households into fuel poverty, which means having to spend more than 10% of your income on fuel. A rise of 15% to 20% would therefore cause even more hardship to more families.

The number of households struggling with fuel poverty has already doubled since 2003 to more than four million, according to research by the centre-right think tank, The Bow Group.

A further sign of future pricing misery was the launch last week of nPower's new online energy plan, the most expensive on the market. New customers will pay £134, or 17% more than existing online customers and £77 more than customers on standard tariffs, according to uSwitch. The plan makes nPower about £159 or 21% more expensive than similar deals from Scottish and Southern Energy and British Gas, the two cheapest firms.

Tim Wolfenden at uSwitch says: "This is a clear sign of the shape of things to come. We fully expect nPower to redress the balance in the new year with hefty price increases on its standard plans too.

"The return of the £1000 average energy bill is imminent. The only question now is which supplier is going to break ranks first and put up prices on standard plans."

Energy companies blame the price increase on a rise on the cost of wholesale gas. But some experts argue that suppliers are quicker to pass on price rises than price falls.

Allan Asher, chief executive of energywatch, the independent watchdog, says: "Gas is abundant; there is no scarcity or shortage of gas, so there should be absolutely no need for its price to rise. The apparent race to raise prices is in marked contrast to the industry's failure to act when it comes to cutting the burden of bills for consumers.

"In the past year, wholesale gas prices have fallen by 50%, and while the industry enjoyed the respite, it was in no hurry to share the benefits with consumers. Suppliers waited until spring this year to pass on miserly reductions to their customers of an average 15% off gas bills and an average of 4.9% off electricity bills."

Energy firms reject the claims. A spokesman for nPower says: "Suppliers smooth out some of the volatility of wholesale prices for their customers. They don't feel the full impact of the decreases, but they don't feel the full impact of the increases either."

Consumers can fight back by switching to a cheaper supplier. Scott Byrom of Moneysupermarket recommends Price Fix 2008 from Scottish and Southern. The online tariff is fixed until November 2008, but there are no penalty charges for switchers.

Figures from uSwitch.com show that 9.3 million consumers have never switched energy providers, even though they could save up to £325 on their gas and electricity bills just by shopping around for a better deal.

Wolfenden says: "The golden rules of switching are: move to dual fuel (getting both gas and electricity from one supplier), pay by direct debit and sign up to an online plan to make sure that you are getting the best available deal. These three simple steps could save you time and money."