Thousands of struggling households who have to use PrepayPower for their electricity and gas are about to be hit with massive price increases, it was announced yesterday.

It was confirmed that PrepayPower is raising its electricity prices by 29% and its gas rates by 19%.

The company has 170,000 customers and the hikes will add almost €340 a year to the average electricity bill and almost €430 to the average gas bill, making a total increase of €770 for the 60,000 homes that use its gas and electricity.

This is PrepayPower's third price increase so far this year, a situation it blamed on "continued upward price pressure on international energy markets". It claimed the hikes would be even higher if it had not pre-bought fuel and power at an agreed lower price, a practice known as 'hedging'.

It last raised rates in July when the price of its electricity went up by 12.5% and its gas rose by 21%.

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Before that, the company raised its prices by a similar amount in April, and also raised its prices twice last year. The increase announced yesterday is the 14th hike from all suppliers in this country so far this year.

Daragh Cassidy, of utility switching site Bonkers.ie, said: "We know that those on lower incomes tend to use prepay energy more than other households, so this price increase will be a particularly tough blow for these households.

"Sadly, it's almost a given that prices will increase even more this winter unless urgent action is taken at an EU level to stem the rise in prices."

A PrepayPower spokesman said: "Regrettably, surging international wholesale costs make customer price increases inevitable. Were it not for our extensive hedging operations, these increases would have had to be significantly higher.

"We continue to work hard to protect customers to the greatest extent possible from the impact of these international developments."

The spokesman added: "PrepayPower is deploying hedging reserves to absorb as much of the increased costs as it can, to shelter customers from much of the wholesale cost inflation."

Consumers' Association of Ireland chief Dermott Jewell said: "It's not entirely unexpected as with the majority of providers. The difficulty here is clearly the fact that specifically it will impact all those who are in the worst possible situation.

"Whatever has got to be done, these are the groups that need to be addressed very, very well in the provisions within the Budget."

He said this is "an indication very shortly before the Budget is announced that the situation is decidedly disimproving". Mr Jewell added: "It needs to be addressed in the Budget because this will guarantee additional debt and worry for this particular cohort of consumers."

PrepayPower customers use electricity and gas on a pay-as-you-go basis by topping up their meters with a smartphone app or by purchasing credit in newsagents or other shops, so they avoid monthly or quarterly bills. It is expected that the changes will increase the cost on average by €6.53 per week for electricity and €8.24 per week for gas.