Energy giants look set to defy Ofgem’s demand not to raise prices after accusing the regulator of getting its sums wrong on their costs.

Senior executives at some of the firms said Ofgem had underestimated the costs the industry is facing. Their stance increases the prospect of higher energy bills as households brace themselves for a raft of other price rises this year driven by the falling value of the pound.

Ofgem warned the Big Six firms late last week that there were no grounds for hiking their standard tariff prices this winter.

Energy bills: Families face other price rises this year driven by the falling value of the pound

The regulator’s boss Dermot Nolan said total costs for the Big Six energy companies – which supply about 90 per cent of households – were about 15 per cent higher this month than in January last year. But he pointed out that energy groups bought most of their energy on wholesale markets 18 months in advance.

A senior executive at one of the major energy companies said: ‘We will look at our own figures on costs rather than those from Ofgem and take a view from there.

‘If our costs have gone up more than Ofgem has admitted, then our prices might have to as well.

They added: ‘Ofgem’s figures do not include the cost of the roll-out of the smart meters programme nor does it include the cost of the capacity mechanism – the Government’s auction process where we all bid to supply energy.

‘They’re both Government-imposed costs and Ofgem has missed them out of its calculations. When they’re included, our costs have risen by nearer 20 per cent than 15 per cent.’

Standard tariffs which are at the centre of the costs dispute are the rates paid by 70 per cent of households.

Ofgem said it regarded smart meters as operating costs so had not included them in its calculations, while capacity mechanism costs would be included in future updates.

British Gas, E.On and SSE have said they will freeze prices this winter, while EDF Energy will increase electricity prices by 8.4 per cent from March while cutting gas bills by 5.2 per cent.

Energy tracker: Ofgem's new price index tracks the wholesale cost of energy

The wholesale cost of energy has risen sharply in recent months. The price of gas went up by about a third in the six months to December while electricity rose by more than 40 per cent.

The increase in wholesale costs has forced many smaller energy suppliers to raise prices since they tend to buy energy on the wholesale markets for use at once and so are less able to ride out short-term price increases.

Some smaller firms could go bust this year. GB Energy collapsed in November blaming rises in the wholesale cost of energy.