UPDATE 2-Centrica's British Gas raises prices by 6 percent


* Domestic gas and electricity prices to rise 6 pct on Nov16

* Average annual fuel bills will increase by around 80pounds

* British Gas says faces rising wholesale prices and upgradecosts

(Adds Ofgem data)

LONDON, Oct 12 (Reuters) - Centrica PLC , the ownerof Britain's biggest energy supplier, is raising its domesticgas and electricity prices by 6 percent next month, saying itwas necessary to cover rising wholesale prices and upgradecosts.

Annual dual fuel bills for customers of its British Gas unitwill go up an average 80 pounds ($130) after Nov.16, Centricasaid in a statement on Friday, acknowledging the additionalstress this could put on already stretched domestic budgets.

The company said it was facing rising wholesale energyprices against a backdrop of dwindling North Sea gas supplies,as well as higher costs to upgrade the national grid and make itmore energy-efficient.

"We know that household budgets are under pressure and this1.50 pound per week rise will be unwelcome, said British GasManaging Director Phil Bentley.

"However, we simply cannot ignore the rising costs that arelargely outside our control, but which make up most of thebill."

British Gas said it was increasing the help available tocustomers to reduce their energy consumption, for example inimproving their home's insulation.

"We need an energy efficiency culture in Britain today;rising prices don't have to mean rising bills. We are offering ahuge amount of help to customers to help them cut the amount ofenergy they use and keep their bills under control," it said.

The move by British Gas came a day after regulator Ofgemreleased a report showing that 3 percent of the UK populationhad debts relating to gas and electricity payments last year.

The numbers were slightly down on 2010 but the report,published late Thursday, said the average amount owed byindividuals for gas bills rose by 10 percent to 371 pounds.

"There are signs that the recession and high energy billsare continuing to have an impact on consumers struggling topay," Ofgem said.

British Gas is the second of the big six energy providers tohike its prices in the past two months, prompting fears fromconsumer groups that other firms may follow suit.

Shares in Centrica were down 0.7 percent in morning trading.($1 = 0.6234 British pounds)

(Reporting by Natalie Huet, additional reporting by SusannaTwidale; editing by Paul Sandle and Keiron Henderson)

((natalie.huet@thomsonreuters.com)(+44)(0)(207 5421272)(Reuters Messaging:natalie.huet.thomsonreuters.com@reuters.net))