Rising costs store up problems for the economy as a whole, a parliamentary committee has suggested.
Energy markets are "not functioning as efficiently as they should" - and customers and businesses are set to suffer as a result.
A new report from the parliamentary Business and Enterprise Select Committee predicts that, as a result of bill hikes caused by a lack of competitiveness in the sector, thousands of manufacturing jobs could be lost due to increased industrial costs.
However, the MPs said that there was no evidence that the UK's gas and electricity providers secretly colluded with each other to fix costs and keep prices high.
"The UK's energy markets are not functioning as efficiently as they should…industrial consumers now face prices above European levels," the report claimed. "If these price differentials are sustained, they will affect the competitiveness of the UK economy."
Committee chairman Peter Luff added: "It is clear that there are very real problems in the energy markets at all levels...which need to be addressed."
The report comes as EDF, one of Britain's "big six" providers, announced price rises to customer energy tariffs of 22 percent for gas and 17 percent for electricity. The cost increases, which have come about due to high wholesale energy prices, are likely to be mirrored by other providers over the weeks to come.
Between them, the "big six" supply gas and electricity to 96 per cent of the UK market.
Compare Gas & Electricity Suppliers via money.co.uk
