Big energy price increases of up to 40% have been discussed at a recent meeting between the bosses of the big six energy firms and MPs on the parliamentary business and enterprise select committee.
The suppliers confirmed that big increases in gas and electricity bills are likely this year.
The wholesale gas price is closely linked to the price of oil, which itself hit a record high of just under $140 a barrel this month.
Sam Laidlaw, the chief executive of Centrica, which trades as British Gas, said it was "clear that gas prices are going to have to move up". And Ian Marchant of Scottish & Southern Energy acknowledged that prices might rise by as much as 40%.
Energywatch says that the average bill is now £1,058 per year. Rises of the levels being discussed could add up to £400 on the average bill.
Protect yourself switch now!
In response to the news, Sean Gardner from MoneyExpert said "Now is the time to protect yourself from these increases and switch to a fixed or capped plan, before they disappear."
"There are 4 suppliers currently offering fixed or capped tariffs and while they may be initially seem slightly more expensive than the current standard and online tariffs, over the next 12 months you will be protected from future price rises and could save a lot of money."