OFGEM's decision to raise energy bills for customers by almost £100 a year has been branded "absolutely disgraceful".

Fifteen million households will be affected by the plans, which come into force on Thursday, after the regulator said suppliers could pass on the rising cost of gas and electricity to customers.

Ofgem announced in February that its price cap for the 11 million British households that are on their supplier’s default tariff could rise by £96 to £1138 from April 1.

A further four million households with pre-payment meters could see their bills jump by £87 to £1156.

Pascale Robinson of We Own It, which campaigns for UK public services to be publicly owned, hit out at the move.

She said: "It's absolutely disgraceful that people are being forced to pay more for their utility bills in the middle of a pandemic and an economic crisis. Millions are already struggling to pay their bills, and this will only push more people into economic hardship and fuel poverty. 

"For too long private companies running these services have been ripping us off, charging us through the nose while providing a shoddy service.

"Whether it's water companies polluting our rivers or energy companies failing to invest in renewables – all while paying out millions to shareholders – privatisation has demonstrably failed. 

"It's time to end this for good. It's time to bring all of our utilities into public ownership so they can work for all of us, not just the shareholders of private companies." 

Consumers have been urged to shop around for the cheapest deal since the increase was announced.

READ MORE: 'Insulting': Ofgem slammed as energy bills to rise for 15 million UK households

Ofgem’s decision followed an additional £23 rise that energy suppliers have been allowed to charge customers for bad debt.

During the Covid crisis companies have struggled to get some households to pay their bills, so Ofgem decided it needed to allow them to spread that cost across the country.

The latest increase more than wipes out the gains that consumers made in October, when the price cap dropped by £84 to a record low since the policy was introduced in January 2019.

It comes as unemployment hit 1.7 million in January and 4.7 million people are on furlough.

Ofgem reviews and changes the price cap once every six months.

The £1138 annual cap is calculated based on the usage of an average household. Energy suppliers are required to price below that cap, with most setting prices just a couple of pounds under.

READ MORE: Energy price hike will undermine all Scotland's work to combat fuel poverty

Citizens Advice acting chief executive Alistair Cromwell said: “With the rise in the energy price cap, many will have to pay more and rightly expect a decent service. Suppliers must step up to give their customers what they deserve.

“Everyone should consider whether they are getting value for money from their supplier – paying more doesn’t always mean you will receive a better service.

“Don’t put up with it if it’s not good enough. Shop around if you can.”