Energy bills could rocket by as much as £60 a year for some residents in Sheffield.
British Gas is to increase energy bills for dual fuel customers on its standard variable tariff by an average of 5.5 per cent - or £60 a year - hitting 4.1 million households nationwide.
Parent company Centrica said its decision has been driven by 'rising wholesale and policy costs'.
However, the price hike will not hit 3.7 million customers who are on fixed-term contracts, prepayment meters or classed as vulnerable.
A spokesman said: "Wholesale gas and electricity costs and the costs of Government policies, including the smart meter roll-out and schemes to reduce carbon emissions, continue to rise.
"We continue to advocate that the funding of all Government policy costs should be paid for in a fairer way such as through general taxation."
The price of the British Gas Standard Variable Tariff will increase on May 29 by £60 to £1, 161 a year.
Energy firms have been facing pressure over the way they treat customers in the UK, with controversy over pricing and the use of standard variable tariffs which have been deemed poor value for consumers.
British Gas announced plans in November to scrap SVTs for new customers ahead of Government plans to impose a price cap on the costly energy products, which Centrica has warned could have 'unintended consequences' for the market.