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

* Domestic gas and electricity prices to rise 6 pct on Nov 16

* Average annual fuel bills will increase by around 80 pounds

* British Gas says faces rising wholesale prices and upgrade costs

(Adds Ofgem data)

LONDON, Oct 12 (Reuters) - Centrica PLC , the owner of Britain's biggest energy supplier, is raising its domestic gas and electricity prices by 6 percent next month, saying it was necessary to cover rising wholesale prices and upgrade costs.

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

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

"We know that household budgets are under pressure and this 1.50 pound per week rise will be unwelcome, said British Gas Managing Director Phil Bentley.

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

British Gas said it was increasing the help available to customers to reduce their energy consumption, for example in improving 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 a huge amount of help to customers to help them cut the amount of energy they use and keep their bills under control," it said.

The move by British Gas came a day after regulator Ofgem released a report showing that 3 percent of the UK population had 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 by individuals for gas bills rose by 10 percent to 371 pounds.

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

British Gas is the second of the big six energy providers to hike its prices in the past two months, prompting fears from consumer 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 Susanna Twidale; editing by Paul Sandle and Keiron Henderson)

((natalie.huet@thomsonreuters.com)(+44)(0)(207 542 1272)(Reuters Messaging: natalie.huet.thomsonreuters.com@reuters.net))