The Energy Retail Association (ERA) has said that a potential windfall tax on energy firms could seriously harm future electricity and gas generation in the UK.
A number of MPs have recently called on the government demanding "aggressive action" if energy firms do not reduce prices in line with drops in the wholesale costs of oil.
They have called for an example similar to the announcement of a windfall tax suggested by US president-elect Barack Obama
Peter Jenkins, head of media relations and communications at the ERA, said there is a need for investment in new energy generation.
He added: "This is an industry that keeps Great Britain going; we keep the lights on, we heat your homes, your children's schools and power your hospitals.
"This is not the time to be contemplating further taxation on one of Great Britain's most essential industries."
The business and enterprise committee recently issued a report stating that energy price drops should be introduced to help vulnerable households survive through the winter months., the Daily Mail reported.
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