Where Next for Fuel Prices

Where Next for Fuel Prices?

With the price of Crude Oil climbing to new highs day by day and the seemingly inexhaustible demands of the tax man, our take-home pay seems to be shrinking every month. A tankful of fuel in the car gets more every time we fill up. The gas bill every quarter makes us start looking for the leaks. The electric bills arrival finds me checking the meter readings because Ima certain there must have been a mistake. On top of that after a particularly dry couple of winters there is a hosepipe ban so I cannot wash the car and the water rates have gone up again! Without being extravagant in our expenditure, the end of every month appears to arrive with a nil balance in our banks account or even worse…

The question is - can we do anything about it?

Do you think fuel prices are going to come back down?

Somehow I think not. Oil is a finite resource and will eventually run out

Yes; the oil companies have geologists working around the clock in the most inhospitable places on earth looking for new supplies, but it will still run out. It has a scarcity value which means that the price of crude oil and therefore fuel at the pump will always tend to rise.

Yes;there are reserves in places like the oil sands and oil shales and, as the World Energy Council noted;-

“If a technology can be developed to economically recover oil from oil shale, the potential is tantalisingly enormous.”

If the contained organic material could be converted to oil, the quantities would be far beyond all known conventional oil reserves. Oil shale in great quantities exists worldwide: including in Australia, Canada, China, Russia, South Africa, and the USA. With increasing numbers of countries experiencing declines in conventional oil production perhaps oil shale will eventually find a place in the world economy, but the energy demands of blasting, transport, crushing, heating etc, together with the safe disposal of huge quantities of waste material, are large, not to say extremely expensive.

Yes; modern cars are increasingly frugal with fuel consumption and new technology is being developed but without a major political and economic shift the petrol (and diesel) engined vehicle will still be the transport of choice for the majority of the world’s population.

In other words the demand for fuel will continue rising and the price to the consumer will continue to rise.

What about the environment?