Dropping wholesale prices 'does not mean cheaper energy bills'

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UK energy firms will not pass all savings on reduced wholesale gas and electricity prices on to consumers, according to an industry chief.

Paul Golby, chief executive of leading energy supplierE.ON, has told the Observer the entire industry needs to "protect profit margins", despite oil prices tumbling to just over $40 (£27) per barrel.

He added that profits across the board need to be higher in order to invest around £100 billion to build new power and wind farms to meet environmental targets imposed on the industry.

Mr Golby said: "If wholesale gas prices have fallen by a third, it does not mean retail prices will go down by the same amount."

E.ON recently donated £20,000 to the Magdalen Project in Chard in order to help them fund a new biomass boiler.

The installation is expected to reduce the charity's annual fuel bill by up to 70 per cent.

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