Four million British Gas dual fuel customers will be hit by a price increase of 5.5% later this month.
Bills for people on a standard variable tariff (SVT), which is typically the most expensive package offered by an energy company, are set to increase by an average of £60 a year.
The changes will come into force on 29th May.
British Gas owner Centrica is blaming the rise in prices on initiatives such as the smart meter roll-out and schemes designed to reduce carbon emissions.
But Government Energy Minister Claire Perry has described the price hike as "unjustified."
"We are disappointed by British Gas's announcement of an unjustified price rise in its default tariff when customers are already paying more than they need to," she said.
"This is why government is introducing a new price cap by this winter to guarantee that consumers are protected from poor value tariffs and further bring down the £1.4 billion a year consumers have been overpaying the Big Six.
However, the company has said the changing prices are beyond their "control."
Customers who are on fixed-term deals will not be affected by the rise in prices.
British Gas Chief executive Mark Hodges said: "We fully understand that any price increase adds extra pressure on customers' household bills.
"This increase we are announcing today is reflective of the costs we are seeing which are beyond our control."