Cutting Fuel Costs

Petrol duty rises today by 1p/litre.

Have you had that email forwarded and re-forwarded from a friend of a friend of a friend? The one that urges you to boycott Esso and BP when buying petrol, to force the wicked oil companies to bring prices down to £0.90/litre?

I class it as a "quasi-virus". It urges you to send it to all your contacts and if everyone does that it truly means millions of messages. Why a virus? Because it's just setting out to clog up and slow down the internet with all these messages.

What about the boycott of Esso and BP?

First, it's not true when they claim that the oil price is "as low as it has been for a while." It hit $147/barrel in July 2008 and then fell back, but it's been climbing since the beginning of last year and today is at $83. In sterling that's £73 in July 08 and £55 now - the gap is closing because sterling has fallen against the dollar. The long term average for oil is around $30, but as it runs out and we have to get it from increasingly remote and unstable regions the cost of production goes up and up. Industry experts predict the $200 barrel within 5 years!

So what happens if we stop buying from Esso and BP? The truth is that Morrisons, Sainsbury's, Tesco and all the rest don't own oil wells or refineries. They buy petrol from the oil companies - like BP and Esso. Even if we managed a 100% boycott there would be no change to the price - though there might be queues at the supermarket forecourts! As with electricity and gas, we cannot do anything to drive down the price of what is becoming a scarce resource in the face of growing world demand and population increase. The only solution is to get the very maximum out of every gallon: drive carefully, drive only when you have to, choose an economical car. Very boring, but I'm afraid it's the truth.

FUEL DUTY RISE DEFERRED

No 3p petrol duty increase on 1st April - instead it will be 1p, with the rest phased in after the election. Undoubtedly rising petrol prices will increase inflation, but we cannot soften the blow of rising oil prices through the tax system. Oil is running out - or hadn’t you heard? Yes, we may be able to get it from tar sands, from corn or from beneath distant oceans, but it is still running out and as we attempt to mop up the last resources it will get more and more expensive.

Should we encourage people to use less oil by pushing the price up? In the long term that may work, but in the short term it will make life difficult for many “hard-working families” and most other people as well. Few can afford a £20,000 electric car; fewer still can find anywhere to charge it. Will there really be a significant number of buyers prepared to put up with a range of only 100 miles?

Taxation is always a blunt instrument, and never a substitute for policy. Instead of arguing about petrol we should be debating the whole transport and mobility issue. Instead of reserving £30bn for new high-speed rail links across the country shouldn’t we be looking at the millions of shorter journeys that millions of people make every day? Considering how video links and high-speed broadband can reduce the need for travel? Planning to increase home working? Questioning why our lifestyle and working patterns demand more and more travel?

[Written on a train]