Chancellor Alistair Darling has called for a meeting with energy regulator Ofgem following concerns over rising fuel prices.
It comes after Npower announced price hikes of 17.2% for gas and 12.7% for electricity. These came into force on 5 January.
The move will increase typical Npower bills by £95 for gas and £64 for electricity and will take the average dual power bill to more than £1,000 a year.
Npower blamed the move – which affects non-online tariffs – on steep rises in wholesale gas and electricity costs, which it said had risen by more than 60% since last February.
Industry analysts have predicted that other energy suppliers will now announce price rises over the next few weeks.
In a letter to Ofgem chairman Sir John Mogg and chief executive Alistair Buchanan, Mr Darling asked for a meeting soon to discuss the implications of the price rises.
Consumer watchdog Energywatch has called on other power companies not to follow Npower’s lead and says the energy market in general is failing customers.
Energywatch Director of Campaigns Adam Scorer said: ‘That Npower is able to go to their customers with such enormous rises suggests something is very badly wrong not only in the GB energy market but in Europe as well.
‘There is no actual shortage of gas across Europe, we have new pipelines to bring that gas to the UK, greater storage capacity than before and terminals to bring in super tankers full of liquefied natural gas.
‘But, without any significant event or period of cold weather, the wholesale gas price has been extremely volatile. Why? Because the major European energy giants gas producers are able to raid the UK for gas when it’s cheap and levy punitive prices when demand is higher.’
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