Tuesday, September 13, 2005

# Posted 10:48 AM by Patrick Belton  

GETTING HIGH: This is a post about perils of petrol prices, not the plentiful pleasures of alpinism, which are, by contrast, nice. (I cite Amis's law: there is no end to the ways in which nice things are nicer than nasty ones. On a metatheoretical level I also cite Hitchens, whose invigorating essay on Lucky Jim lately marks it as my favourite review of my favourite comic novel.)

In London, one of our correspondents was queued for hours last night for petrol amidst panic purchasing harkened by a hurricane storm of emails and text messages betokening instant exhaustion of the British, if not quite yet global, petrol supply. Panic buying has been reported nationwide by the Cumbrian News & Star, the Norwich Evening News, and in the Brummie press. There have been calls for the Chancellor to cut duties on fuel (Mr Brown has already deferred an inflationary 1.22p litre rise, due in next spring's budget, for six months); the Treasury is almost certain to reject these calls and instead plead for Opec to be more open about their reserves in order to stabilise prices. (In Britain up to 80p in every £1 spent on fuel goes to the Treasury in the form of VAT or other taxes.) (As far as why I'm terribly bothered by all this, being in a Swiss alpine scriptorium, I suppose that having had a breakfast that included an odd chemical substance known as marmite as well as a daily tea intake exceeding three pots a day makes me at present more of a Pom than a not-Pom, see below. If David felt the same way, we could be a pair of pom poms, which would be by far an excess of ps for this post.)

More interesting are calls from motorist organisations to introduce a variable tax, responsive to the market oil price; the Lib Dems call for scrapping fuel duty altogether, in favour of a system of road user pricing based on location, location, and location. (Oh bugger, that's the real estate market. I meant location, congestion, and vehicular emissions.) Noted environmentalist and chair of the PM's Sustainable Development Commission Jonathan Porritt debated Chatham House chair DeAnne Julius, an oil economist, this morning on Radio 4's Today Programme. Porritt was quite enthusiastic that high petrol prices might betoken a broader secular shift toward greater consumer fuel efficiency. Rather than seeing radical revisions in the structure of the petrol market or user habits, though, my guess is to look for all this to blow over instead: in the world market, prices are already showing signs of stabilisation after the Katrina hurricane, and at the pump they'll be shortly back down to their ordinarily high level, instead. (See AP, Forbes; but contra, see Bloomberg quoting DuPont analysts on their expectation that crude oil, natural gas, and petroleum will remain close to their record levels for the foreseeable future.)

Readers knowing more about the oil market and energy policy than me, which isn't hard, are very welcome to write in and contribute their perspectives.
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