back to article The economy: A big Arab did it and ran away, claims PM

It's all OPEC's fault, according to Gordon Brown. Speaking at Google's recent Zeitgeist conference, the UK prime minister told the audience that the world's current economic woes can largely be blamed on the scandalous behaviour of the oil producer's cartel. They're just not pumping enough oil, he claims: Gordon Brown …

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  1. Mike Crawshaw
    Paris Hilton

    Cheap and Decent Whores

    There is definitely a shortage.

    Erm... so I've been told. Not that I would know. I think I heard someone talking about it.

    <-need I explain?

  2. Steve Evans

    Well...

    Or maybe he could stop putting quite so much tax on it... He must be laughing all the way to the bank...

    Has anyone else wondered how the price of UK fuel kept going up even when oil is priced in dollars, and the dollar is currently worth only slightly more than the paper it's printed on... Hmmm...

  3. breakfast
    Flame

    Congratulations Mr. Brown

    Our esteemed leader must be very pleased that after long years he is finally starting to price us off the roads. The only problem being, of course, that his government and his predecessors have offered no meaningful investment in any alternative transport infrastructure, so our choices currently- for the many people outside of a major city- are to suck it down and spend a huge amount of money on driving or not to go places. Thanks, elected representatives, thanks a sodding bundle.

    Also, if he wanted oil prices to stay low, he might have suggested to his boss a few years back that he shouldn't embark on a ridiculous scheme to destabilise the middle east with the entirely predictable outcome of oil prices rising. Ultimately probably that means oil companies can charge more, which means more money for a certain Texas oil man and his golfing buddies - I'm sure that was a major factor in the decision to initiate that war - but the benefits to the rest of us are really somewhat slim.

  4. Steven
    Thumb Down

    Erm...

    Isn't it Gordan Brown who just agreed to a 4p tax increase on fuel, even though his advisors said he could afford to lower it by up to 7p...

    That guy really doesn't know his arse from his elbow. How he manges to get dressed in the morning is beyond me let alone run the country.

  5. Graham Dawson
    Flame

    Is it not more likely...

    ... that Brown's tax increases on every single damn thing in existence are the main culprit?

    Incidentally, I didn't spot it in the article (I admit I skimmed a little) but... Diesel is now more expensive than Unleaded. Diesel, which is still, even taking into account particulate pollution, more environmentally friendly than regular petrol, is now taxed at a far, far higher rate than unleaded. This is the stuff that ctually drives the economy. It's the stuff trucks and trains run on, those things that make our economy actually viable by transporting goods around, and it's taxed *more*. No bloody wonder prices are going up!

    And don't even get me started on Broon's attitude to anyone attempting to actually put their money where their mouth is on the issue. Remember when he famously slapped a huge backdated tax demand on a few people for using chip fat to run their vehicles, claiming it was a "loophole" in the tax system. He liked closing those loopholes, squeezing a few extra pennies out of the economy to fund god know's what, maybe the whole PFI fiasco, but raising costs for everyone and putting a drag on the economy in the meantime. And then he has the temerity to blame the oil cartel for problems HE created. I'd tell him to look in the mirror before he starts blaming people but he'd probably just pull a Wellington, close his working eye and yell "I see no taxes!"

    Or something.

    I'm a Tory voter, so that's who I'll be voting next time around but, god help me, I'd rather see the lib dems in power than this useless lot.

  6. andy gibson
    Unhappy

    More to it than just hitting car drivers

    Rising oil prices affect *everyone*, not just anyone who owns a car.

    Bus and taxi fares, increased delivery costs on goods and food - it all gets filtered down to us in the end.

  7. Anonymous Coward
    Anonymous Coward

    Demand and supply...

    The supply of whores matches the demand except where people are not buying whores because the price is too high, then the restricted supply is failing to meet demand that is there but not at that price.

    In that situation there is too small a supply of whores.

    This has knock on effects, rapes may increase, the market for sex toys is weakened, and Nazi love dungeons lie empty.

    Little Billy who's mum is a dominatrix (and who's dad is a spy) goes hungry and starves to death (despite a valiant effort at eating bird feed).

    There is an outcry, politicians react and insist that the supply of whores be increased to stimulate the faltering economy.

  8. michael

    Cheap and Decent Whores

    no shortage of them here

    um I mean whhore what is a whore

    <_< >_>

    yes I think I got away with it

  9. richard
    Stop

    petrol price high is good, it's the rest that's the problem

    if you look at the whole situation, the high price of petrol is quite a good thing really (but £1.25 for diesel is a piss take - get them both around £1.10) BUT the problem, as usual for UK consumers, is EVERYTHING ELSE IS TOO FUCKING EXPENSIVE! electric, gas, water, council tax is too much.

    my ideal situation - get petrol/diesel down 10%, other taxes/bils down 20%

    sorted.

    ish.

  10. Anonymous Coward
    Anonymous Coward

    Brown: Machiavellian master or moron?

    http://www.newscientist.com/channel/being-human/mg19826551.400-lifting-the-lid-on-the-science-of-persuasion.html

    Point 7

    "First, people have to be convinced that the issue is relevant to them, that it affects them or their children or their community. At that point, says Turner, you need to hammer home what's wrong with the world as it is. Once you have got people roiled up, you can offer them a way to remedy the situation."

    Brown: Machiavellian master or moron? You decide.

  11. mark Silver badge
    Stop

    Peak Oil

    that kinda makes sense, but market forces alone will never solve this problem.

    Nothing will.

    We should move away from fossil fuels , correct, not because of global warming, but because there isnt much left.

    Any day now supply will outstrip demand, and you wont get oil no matter how much you want to pay.

    we should develop green enrgy - correct . Not because of global warming but because our civilisation runs on energy and we will still need it when oil production goes into decline.

    yada yada yada , i get tired of reiterating this. people just think i'm nuts.

    just put "hubberts peak" into google.

    its true, really - the end of the world is nigh!

  12. Ferry Boat

    @Steve Evans

    Is that true? Does Gordon get all the tax money himself? I didn't know that. Interesting point about exchange rates though. I wonder if we pay OPEC countries in dollars.

  13. Slaine

    UK is effectively self-sufficient in Oil

    ... in so far as we extract as much from the North Sea as we use. (Correction - certainly true a few years ago - the current figures have not yet been released so I cannot confirm).

    Now is this the same Gordon Brown who claims to be the sole reason why Britain has not had a recession over the last ten years but refuses to acknowlege his part in the hyperinflaction of house prices and decimation of every single public service; or is this perhaps the same Gordon Brown who believes that some strains of cannabis can be lethal but conveniently ignores the financial and emotional suffering brought about by rampant alcoholism; or is this perhaps the same Gordon Brown who thinks a 36 second shakycam on ooToob is an effective way to improve his popularity after hiking up the taxation system yet again; or perhaps this is the same Gordon Brown who prefers to define his role as steward in preference to actually governing the country. I was a steward on an oil rig for a time - it means "laundry duties, kitchen portering, vacuuming the floors, polishing the surfaces, cleaning the toilets and making sure the was enough buns and bogroll for the roustabouts" (and I didn't get £100,000 pa plus backhanders - oops - sorry "tips" for doing so).

    There simply isn't an icon brown or smelly enough to describe the turd that this man represents, scuffed or polished.

  14. a walker

    Gormless Gordon strikes again!

    Gormless appears to ignore the fact that £1.14 per litre cost consists the oil price plus tax and value added tax at 17.5%.

    Manufacturing Cost £ 0.35

    Retailer £ 0.09

    Fuel Duty £ 0.52

    VAT £ 0.18

    Gormless is getting £0.70 for every litre of petrol (gasoline) and he has the cheek to blame OPEC!

  15. TMS9900
    Stop

    Cool

    An interesting article, which I have to say I pretty much agree with.

    I guess it's true that (however much it hurts) prices should remain high in order to reduce demand.

    However, where I don't really agree is with respect to home heating costs.

    You see, we have a choice with regard to how we get to work in the morning: Car, bus, train, cycle, walk etc. We don't *have* to live 100 miles away from where we work. We have a choice. Thus, I would agree that in terms of high pump prices, yes, keep 'em high - force the public to change.

    HOWEVER, we don't have a choice when it comes to cooking dinner for our kids, and keeping them warm. It's gas, or electric. That's it.

    Thus, I say, the gas and electric companies should have to pay NO TAX to the UK governement on their oil/gas purchases, and be prevented, via legal framework, from profiting on the difference in margin.

    Also, with regard to VAT on gas/electricity bills: No. VAT was a tax orginally levvied on luxury items. Cooking dinner for your kids on a gas or electric cooker is not a luxury Mr. Brown. No tax on household fuel bills please.

    Same for commercial transport. I read yesterday that a 4 pence increase in fuel costs for an articulated lorry raises it's annual fuel bill from £39,000 to £52,000. Who swallows that cost? WE DO. It's not rocket science. BROWN is responsible for this economic downturn. Not some arab in a dish-dash. Inflation is purely down to BROWN and his cronies.

  16. Robert Harrison

    pockets

    Just remember folks in the governments eyes, the public have very very deep pockets. After all, MPs have shed loads of wonga to splash around. They've been splashing it around for so long they've convinced themselves that everyone else must have the same size sheds and can therefore 'bear the burden'.

  17. Peyton
    Thumb Down

    Sometimes overlooked

    While I agree that it's good to encourage people to use mass transit, ride a bike, etc., I'm pretty sure that if you tell a farmer these are his solution to rising fuel prices, you may meet with some dirty looks (if you're lucky). Can't till a lot of land with a bicycle... Simply raising prices across the board is not an optimal solution.

  18. Cosmo
    Stop

    Too simplistic

    The problem is that if you hike up the cost of petrol, it doesn't just affect the motorist. As someone earlier pointed out, buses, cabs, lorries and trains all require this oil-type stuff to run.

    If you start raising the prices, so will the bus companies (Stagecoach and First - I'm looking at you. £1.50 for a single 2 mile bus ride???). Cab drivers will factor that into their fares, which will cost the public and businesses more.

    All those lorries delivering food to the supermarkets will have to factor in the cost and go bust. And what about everyone buying their CDs/DVDs/Washing machines online? They don't magically turn up to your front door.

    I'm not entirely sure what the solution is. More efficient cars, definitely. Maybe the government subsiding public transport to an extent? Loss leading routes available so that people who don't live on top of a train station can actually get there?

  19. Simon Ball

    Giffen goods?!

    My god. I remember those. In fact I remember my economics lecturer and the entire class struggling to come up with a single real-world example. I'm intrigued that somebody has finally actually proved their existence.

    Oh, and Graham, sorry to be a pedant but you're thinking of Nelson, not Wellington.

  20. Anonymous Coward
    Flame

    The Register also pretty short on great economists

    " the audience was pretty short on great economists - which is why he could get away with such nonsense. "

    But presumably you'll put him right, eh Tim?

    "His first blooper is the claim that there is some imbalance between supply and demand: of course there isn't, how can anyone be quite so silly? Prices adjust exactly and precisely so that supply and demand equal each other. "

    Er hello. Are prices really this flexible when they're fixed by a bunch of rich men in a 7 star hotel? The price isn't adjusting according to the demand. It's demand which is varying according to the price. And this is Mr Brown's exact point.

    So Tim, your arguments about climate change etc... all good.

    But the economics... hmmm... How can anyone be quite so silly?

  21. Nick Davey
    Unhappy

    Shunting the blame

    He can blame OPEC all he wants, oil might cost more $ per barrel but when we pay the highest petrol prices in the civilised world due to the tax on it his argument falls flat on it's face. I'm sure the Sheikh's in their golden palaces think it rather amusing that Mr Brown complains about their stranglehold on dwindling natural resources while the real price of petrol is around 40p a litre, the rest being the governments "cut".

    I wish he'd take responsibility for the screw up that HE has made in terms of this country's economy. I remember when "new" Labour first came to power and every one was cheering, I told them then this was not going to end well for the country...........

  22. Anonymous Coward
    Anonymous Coward

    Maybe Brown shouldn't use them as an excuse...

    ...but that doesn't make oil cartels an 'ok' thing.

    The enormous rise in oil prices is not a good thing - claiming it to be a driver for some kind of green revolution is just ridiculous. Sure, we need to invest in alternatives and reduce our reliance on oil, but if the diminishing supply costs more and more then we will be spending the same amount (or more) on the remaining oil and then where is the money for investing in alternatives to come from? To suggest the simple rules of supply and demand should be allowed to hold sway over the oil market is ignorant.

    That said, it's pretty clear that supply and demand is not the driving force of the oil market - the oil market is the cartels' play-thing.

    It's incredible that something as important to the stability of the world is allowed to be toyed with for (enormous) profit.

    One thing is certain with oil: it will run out. The only question is, how painful will we allow the remaining years be made by those that own it.

  23. Ash
    Thumb Down

    Excellent stuff!

    So, UK takes on Oil Company.

    Wonder who'll win that one.

  24. Jay Cooper
    Unhappy

    @ Mike Crawshaw

    Depends where you live.......I hear in Eastern Europe they are pretty cheap and decent.

    And did Broon mention anything about Cheap and Decent whores? No. See, always skirting round the real issues.

  25. Steve

    No mismatch

    It all depends on where you stand doesn't it.

    The supply/demand curves intersect to determine the price.

    If you happen to have complete control over the supply side of the equation, then you can artificially restrict it, and the market response is increased prices and 'lowered' demand.

    But what lowered means is the question. People would like to buy more, but they aren't prepared to do so at the current price, so there is a latent unfilled demand which would materialise were supply to be no longer restricted as prices fell.

  26. John Latham
    Linux

    Naiive

    The truth here is that the two things Gordon cares most about are raising taxes and meeting inflation targets. He doesn't give a flying fuck about climate change - it's a long term issue outside domestic political timescales.

    Gordon hates expensive oil because it drives up inflation and brings unrest amongst the proles, at no benefit to his budget. He would much rather have cheap oil, taxed heavily.

    Put another way, expensive oil makes us poor, and that's Gordon's job. that's why he's sulking.

    John

  27. Joss Attridge
    Paris Hilton

    Historical figure in missing eye mystery

    Wellington the famous two eyed general would have been confounded by the mystery of which working eye to close whilst Nelson the famous one eyed Admiral would not have had such an issue.

  28. Righteously Indignant
    Stop

    economics versus environMentalists

    Ok, so Tim Worstall may know his beans when it comes to metals, but he is clearly clueless when it comes to economics and seems to be yet another greeny trying to get everyone wearing hemp clothing and sandals...

    Yes, we desperately need to look at alternative fuels to replace our dependancy on fossil fuels, but taxing us to death is not the answwer and Lord knows our unelected 'representative' doesn't need any encouragement there!

    We're never going to be able to properly investigate these alternative fuels as long as it is the oil companies doing the 'research' - we all know they will do the bear minimum for PR purposes and mothball the rest. As long as oil is trading at the unsustainably silly prices it currently is then it is these very same oil companies who are reaping the profit (cue Oil companies posting another year of record profits...) whilst Joe tax-paying Public is forced to pick up the never-ending tab.

    As a previous poster has already pointed out, it's not just the car-drivers out there that are suffering from this - whole *industries* are folding because of the corporate greed that infests our 'government'. Ultimately, fuel price rises affect the price of EVERYTHING - at some point, no matter what the product is, it is going to be transported - be that by plane, train or truck and if it costs them more to shift it it'll cost us more to buy it. Simple economics.

    By the same argument, you could say that lowering the cost of transportation should also lower the cost of the products or services reliant upon them - could we not investigate to see if abolishing the extra tax on fuels could be countered by raising VAT? Before you start yelling hear me out on this one - read the above sentence again - if the prices of products can fall (because they are cheaper to transport) then raising the % of VAT on them could counter that fall so the products remain at the same price but fuel is signicantly cheaper. This means lower bus/train fares - so we could finally look at making Public Transport a viable alternative... It also means that folk living in rural locations, or simply locations that don't have decent public transport (don't know abut your town but in mine the number of bus routes has diminished significantly over the last few years) can afford to travel to work!

    Going back to the 'green' aspect of the argument - the only way we can truly go green is if we take a windfall tax from the next oil company to declare ridiculous record profits and channel it to the research organisations that have so far suffered from repeated cut backs under this pathetic 'government' of ours so they can look into viable alternatives to fossil fuels and protect them so they can do so without the risk of the big energy companies buying up the rights to anything they discover and hiding it away until the last drop of oil is burned...

    Wow - quite a rant. Sorry! :)

  29. Anonymous Coward
    Alert

    Get to the root of the problem.

    Oh look, its the lesser spotted economist, talking out of the orifice more usually used for other purposes.

    The reason why this price rise matters is because its so fast and so far. Nobody seriously doubts its going to push us into a deeper and longer recession than the economist mismanagement and fraud has already created. Sod the 'free market solves all', this isn't a game; its people's lives.

    What we need is real leadership and strategy to get us towards the post-carbon economy - NOW. Stop wasting money bailing out bankers, lock them up instead and put the investment into real change and real development. I'm sure the economist wonks at the Treasury would be up in arms about that, so that's why we need to get them out of any position of power as fast as possible.

    And that means Gordon and his cadre have to go, quickly. By training they don't understand what's happening, and don't have the capabilities to deal with it even when told.

  30. Perpetual Cyclist
    Flame

    As I have been droning on about for five years...

    ...this is peak oil.

    demand has exceeded supply, globally and permanently. From now on, supply goes down, and the price goes up until demand is choked off.

    But... yell the economists, the economy is less dependent on oil now, because it we use it more efficiently and it is (was, until recently) a very small part of GDP.

    Wrong. We are still fundamentally dependent on oil for our society. We need less per unit of GDP, but that means that each barrel of oil demand choked off destroys a larger chunk of GDP. About seven times larger than the 1970's oil shock.

    What this means is that prices are going to keep going up, and accelerating, until demand is choked off. Already, the poorest third world has been priced out of the market. Now, the wealthy, developed, but heavily endebted first world is competing with the massive, low wage, massively growing and dollar rich developing countries. Who is going to get choked first ?

    www.theoildrum.com

  31. Anonymous Coward
    Anonymous Coward

    Re: Brown: Machiavellian master or moron?

    It's also called positioning, you try persuade people that the action you're about to take is necessary without actually telling them what the action is in advance.

    You'll have noticed all the "alcohol is bad" stories recently?

  32. Anonymous Coward
    Happy

    Raise it High

    Good article,

    As a hamburger munching tree hugger myself, as apposed to a pimply IT spot fest geek I am overjoyed to welcome our new Tax Overlords.

    You lot need to get out more and get some colour in your cheeks, your all so damn pastey, you will never get laid staying in doors, smoking weed and playing computer games.

    Nomex Summer Coat please, thankyou

  33. Anonymous Coward
    Black Helicopters

    Tim

    you barstward!

    My blood pressure is now into 4 figures and rising. What a load of lying tripe that pillock is spouting. HE is the one over taxing us. The US / UK **BANKERS** caused the financial crisis through their own greed. And this; this; idiot blames OPEC. BROWN look at the make-up of the fuel pricing and see who rips out the largest wedge of our cash! Look at the rate that pricing are rising and then try to convince me that the UK's inflation rate is less than Zimbabwe's.

    BROWN do us all a favour, call an election then bugger off back to Scotland!

    Why don't we have a health / politician warning on this type of article.

    Jeez! fscking lying politicians.

    <breaths deeply and slowly> I'm calm now.

    NO I'M NOT - YOU LYING BAS<click><nocarrier>

  34. Richard

    It's not my fault

    It's the wail of government since time immemorial. If you can't blame a dirty foreign Johnny, it must have been the previous administration.

    The problem is that we are shifting to a resource-limited economy and there's going to be no way back - even if OPEC magicked up the entire world reserve and dumped it on the market, there's still supply issues with food and most mined resources as China, India et al rapidly improve their living standards and infrastructure.

    Seeing as our political elite like banging on about how things are so much better in Sweden and we should be copying them, it is perhaps worth noting that, during the last major oil price shock in the 1970s, the Swedish government made long term plans to eliminate their economy's dependency on oil and is on course to be oil free by 2020. What did we do? Struck oil in the North Sea and sold it in huge quantities while it was cheap (while the Norwegians didn't go hell for leather on upping production). GB is only bitter since we returned to being a net energy importer.

    @ Graham Dawson: The "I see no..." trick was done by Nelson, not Wellington.

  35. Vaughan Silver badge
    Alert

    High oil prices are in Gordon's interests

    Evidence of this will become apparent in the great pre-election giveaway in 2010.

  36. Steve Crook

    I'm sure that people in developing countries...

    Are also pleased with the increase, the knock on effect on prices of their transport and food must be making them positively glow with pride at the sacrifices they're making for the environment. </sarcasm>

  37. fords

    Scotland disowns Brown

    I can understand why you want him to bugger off back to Scotland, but the trouble is we don't want him!

  38. Anonymous Coward
    Anonymous Coward

    Not everyone is in the same boat

    Farmers and train operators use "red" diesel

    which is duty free (more or less)

    while buses and lorries pay the full rate.

    or go to jail if found with a hint of red in their tanks.

  39. James Pickett
    Unhappy

    Wasn't me guv...

    Except he can't admit it, of course, since Uncle Gordon's been taking all the credit for the general Western prosperity of the last decade. Actually, if he hadn't spent quite so much of it on consultants and mad PFI schemes (and sold all our gold at the bottom of the market) we might have a bit in reserve for the seven lean years just starting. Every Pharoah needs a Joseph...

  40. Tim Worstal

    Simon Ball

    Giffen goods finally identified:

    http://www.economist.com/blogs/freeexchange/2007/07/as_price_goes_up_so_does_deman.cfm

    Jensen and Miller look at poor Chinese consumers and demonstrate that they consume more rice or noodles, their staples, as prices go up. The idea is the same as with the proverbial poor Irish. People need a certain amount of calories to survive—let’s say 1600 per day. You can either get that by consuming rice and perhaps some vegetables alone, or by eating rice, vegetables and a few bites of meat.

    But meat is expensive. As the price of rice goes up, these poor Chinese can no longer afford the luxury of cooking meat, yet they still need to get to their 1600 calories. So they eat rice instead, which is still relatively cheap compared to meat. Voila!: Giffen behaviour in action.

    What does this mean for the real world? Prices of certain food crops have increased by as much as twofold over the last 18 months, which has lots of negative consequences for the world’s poor. One such consequence might be that demand for staples has gone up even further.

  41. Dave Ashe
    Stop

    Send him back to Scotland?

    Don't send him back up here, things have been going well since SNP got in, please i'm begging you don't send him here, send him anywhere but here.

  42. Steve

    More bullshit economics

    "I think he's simply ignorant of the fact that markets alone, so far entirely unaided by the plans of mice or men, ganging agley or not, have provided us with exactly what a decade and more of international scheming has been straining to push forth. The impetus for us to reduce our fossil fuels usage."

    I don't need any bloody impetus, I need a viable alternative.

    Tell me Tim, by what mechanism does the increasing price of fuel manage to move my house closer to my workplace?

    What's that you say? It doesn't? It simply pushes the low paid into poverty while the rich just think "Fuck it, what's an extra £5 a tank on my wages?" Or is the idea to make travel so prohibitively expensive that I have to get a different job - although, if I could find a job that paid enough to live on without having to drive 30 miles to work, I'd already be doing it!

    The real problem is that economists generally understand fuck all about the real world. They come up with a theory, make a prediction that doesn't pan out and then blame reality for the discrepancy. They then keep the obviously broken theory unmodified and try to make some more predictions with it.

    When predictions don't match observations, you adjust the theory - you don't complain that it's the fault of the experimental subjects who failed to follow your predictions.

    We wouldn't trust economists to make tea in the physics department, nevermind come produce theories.

  43. Shinobi87
    Black Helicopters

    oil

    people seem to forget that crude oil isnt just used for fuel alot of others things come from it aswell like plastics, waxes, etc simple solution is to actually plow money into non poluting car projects but of cause that would be silly because i forgot the big oil and car companies control the world! *cough* who killed the eletric car *cough*

  44. carbonrough
    Black Helicopters

    Sod OPEC, we need something more .....

    ....sustainable(sp?) ..... like ...... HEMP ...... yep HEMP

    http://en.wikipedia.org/wiki/Hemp

    Worth a read and a wonder why!!, we don't utilise this sustainable crop, as its uses are wide ;-)

    Peace

    CR.

  45. Robert Long
    Boffin

    Blind criticising the blind

    Brown is indeed talking crap, but so is anyone who can seriously say that "demand equals supply". This simply is gibberish. I can measure supply; I can put units to it. Demand? Well, that's subjective.

    Economics is an art and not a science or a branch of mathematics, no matter what it's fans claim, for precisely this reason. If you can't measure demand then all your calculations are based on faith. Which is why economics is so much like religion.

    To go back to oil: demand for oil is like demand for health: infinate. How much oil would we like? All of it. We'd like to jump in our cars and drive anywhere for free. In what way is the current supply meeting that demand? In what way is it equal? It's a nonsense statement.

    Demand for oil, whatever it is measured in, is balanced against our demand for other things (sometimes boosted by it, as in our desire to see Granny in America before she snuffs it and leaves everything to the local cat home because we never visited). We chose to pay what it is worth to US, thereby giving up other things we could have bought with that money. Again, this is a subjective thing and totally incapable of being scrutinised by mathematical formulae.

    Brown was a major player in this mess, and we've STILL not seen all the damage. There's still tens, perhaps hundreds, of billions of off-sheet debt in the PFI system that's going to hit the economy like a runaway train sometime in the next 5-10 years.

  46. Anonymous Coward
    Anonymous Coward

    >How does increasing price of fuel move my house closer to work?

    Once you can't afford to commute in your car, you'll move house.

    That mechanism. The same mechanism that people manage to change job to a workplace 10,000 miles from where they currently live.

  47. Ted Treen
    Paris Hilton

    @Most of you...

    Like most of the liberal self-proclaimed elite, Broon is a bad case of arrested adolescence, and is still living (intellectually and politically) in the late 60's/early 70's radical student politics world.

    Paris, 'cos she's actually smarter than most of 'em.

  48. Anonymous Coward
    Pirate

    Some real advice for Steve

    Get a job closer to your house, buy a bike.

    OR

    You seem to be missing the obvious answers to your problems and blaming the market/politicians. If your not happy with the above can I suggest a crash course in civil disturbance and political activism.

    Make it personal

  49. Anonymous Coward
    Anonymous Coward

    @Steve Evans

    "Has anyone else wondered how the price of UK fuel kept going up even when oil is priced in dollars, and the dollar is currently worth only slightly more than the paper it's printed on... Hmmm..."

    The dollar has fallen 5% against the pound in the last 3 years. The price of oil has tripled in that time. I don't think we can expect much mercy from weakening exchange rate (after all, the pound's pretty messed up too).

  50. Simon Ball

    @Robert Long

    Actually, it is perfectly logical if you define the statement properly. It's not "supply equals demand in general terms", which is obviously rubbish, it's "supply equals demand at any given non-zero price in a properly functioning market".

    Supply and demand isn't meant to be hard science. Or even quantifiable. It's just a very simple model of how the interaction between buyers and sellers impacts on price and quantity sold. Demand in general may be infinite, but demand at any given non-zero price is finite. If demand at a given price is higher than the supply at a given price, then the price will rise until the two are equal again. In theory. In practise, it only really holds true in the long run, since there are all sorts of short term barriers that prevent it from working smoothly. But that doesn't mean the model is invalid, merely that it is imperfect.

    But I agree that there are far too many economists who are under the delusion that economics ever can or will be a hard science. Economics, like Game Theory, merely provides a set of intellectual tools, some of which are quite complex, for considering possible solutions to certain problems, and possible implications to certain actions. As long as you don't fool yourself into thinking that it can provide hard, quantifiable answers, it is useful.

  51. Turbojerry

    If you want a dose of reality

    Why oil is going through the roof at Market TIcker

    http://market-ticker.denninger.net/2008/05/thrombosis-thursday.html

    I would really recommend anyone who's interested in what is really happening in the world markets read his daily blog, he may use some trader terminology but once you get passed that his analysis is very good.

  52. Mike Richards

    A better comparison

    Would be like a drug user demanding cheaper smack from their dealer.

    We are addicted to cheap crude. Much of our society is built on having a ready supply of petroleum - from our housing developments to out of town shopping to pizza delivery. And there is a fundamental limit on how much oil can be hauled out of the ground.

    Blaming OPEC is stupid. There are well-understood limits on how much oil can be pumped out of a field and how fast it can be produced. A good petroleum geologist can give you those numbers, and almost any geologist will tell you that the OPEC countries are lifting as much crude as they can without doing irreparable damage to their fields. In fact, some of the World's largest producers have probably already done damage to their fields - largely by depleting gas pressure - by trying to exceed these limits in earlier years.

    With the dubious exception of Saudi Arabia, there is no more spare capacity left in the World. Even if the OPEC countries were to start drilling tomorrow, adding secondary and tertiary recovery to their existing fields and improving their infrastructure, it would take 5 to 10 years to get that additional oil to market, by which time there would be even more demand. And outside of OPEC, things are pretty bleak, all of the largest non-OPEC countries are facing declining production figures and the rate at which new reserves are coming on stream is slower than the slowdown in existing production.

    And no amount of rhetoric from Brown, Bush and the rest of them can stop peak oil. It might be here, it might be 10 years down the road, but it's almost certainly within spitting distance.

    Mind you, the next time you're bitching about the price of petrol, remember that an irreplaceable geological curiosity pumped from kilometres under the one of the coldest, stormiest, most hostile seas in the World, piped through hundreds of kilometres of steel, transformed through a miracle of organic chemisty into a useful product, is only slightly more expensive than milk.

  53. Mike VandeVelde
    Alert

    demand

    "The only problem with this technique is that we've probably already reached the limit of what UK consumers are prepared to pay in tax upon oil and oil based products."

    Really?

    Perhaps if you're talking about the demand for people to go out in their cars on the weekend or vacations. There's room for drying up there. But less tourism won't help the economy, leaving less money for people to afford other things.

    How about the demand for shifting goods around the world? There is some room for drying up there, goods that are produced farther away will become more expensive, and the more expensive goods that are produced closer to home will become more attractive. People not being able to afford as many goods is a downward spiral, leaving less money for people to be able to afford other things.

    How about the demand for producing goods in the first place? Even still there is probably some room for drying up, if you take a look at *ALL* *THE* *USELESS* *SHIT* that is produced. Plus, a little extra room with some simple common sense efficiency measures. People not being able to afford as many goods is a downward spiral, leaving less money for people to be able to afford other things. When those goods are food, well there is a constant minimum demand that becomes a life and death issue if it can't be met.

    How about the demand for domestic fuel? Probably some room for drying up with caulking weather stripping, and improving building codes. People not being able to afford enough domestic fuel can be a life and death matter.

    But still the limit is not what consumers are prepared to pay. Consumers will pay all they can afford no matter what. The limit that's coming is in the basic standard of living that society can afford. And after that passes us by it's the limit of what will keep people alive. And after that all bets are off, hello dark ages.

    The price of oil is *NOT* coming back down. Everything is getting more expensive. This will test the limits of the "healthy" unending growth economic religion. These are serious challenges that require a serious response, no matter how much of a bigot you are towards the green movement. By the time that the average world temperature has gone up by a degree or two and the oceans have risen a meter or so, nobody will be able to see the forest for the complete and total anarchy. So what's your plan? "The marketplace will balance supply with demand." Greeeaaaaat....

  54. Luther Blissett

    Pull the other one, it's got bells on it

    How convenient to equivocate speculation with hoarding, and ignore the futures market (and who is playing it). Just as it is convenient for Brown to equivocate the OPEC suppliers with the price of oil, and ignore the global dollar hegemony pricing fix. Evidence: the rising price of gas. Are we to hear next that commodities and foodstuffs price rises have been caused by export controls in the produced countries?

  55. Anonymous Coward
    Anonymous Coward

    No, not cheap and decent

    Can't this bloke get anything right?

    It's cheap INDECENT whores that I want!

  56. Anonymous Coward
    Pirate

    move closer to your job

    Arguments that people will move closer to their jobs if they cannot afford to commute is misleading. Statistically it will be correct. However the re-organisation also includes a re-distribution of resources. Basically those that are in a position to afford a place to live close to their (future or current) work are not necessarily the same people as those that have the job today. Additionally to this are those that cannot find a place to live close to their job and cannot afford to commute to their job. In theory they should find a job somewhere close to where they live - well it is not exactly automatically the case that those people will be able to fulfill the required qualifications on any job that might be available close to where they currently live (assuming that any job will be available close to where those people live - which is quite a questionable assumption for many). What is likely to happen is that those people who currently have such background (or competence) that they today can pick and choose between jobs will be able to continue to choose jobs in the future. So those well paid job owners will be paid sufficiently also in the future so their employer can keep them. Those middle class jobs which are ok but where the uniqueness of the employee is not as much valued are those who will suffer most, because those are the ones who have the smallest financial reserves and also are viewed as bringing the smallest 'added value' due to their personal uniqueness to enterprises. Many of these will become unemployed. Additionally this will also re-construct the housing market and price of houses. Thus houses requiring significant commuting will become less valuable and thus influence those people who have burdened themselves with high mortgages as their houses might slump in value. The poor and unemployed already have societal problems and by definition are unlikely to see much change of any relevance. Conclusion is that this idea 'move closer to your job' unless it is accompanied with significant state investment in building cheap housing (unlikely) will punish and re-structure the current middle classes more than any other part of the current society.

  57. Anonymous Coward
    Paris Hilton

    OPEC???

    eh..l lets see...

    BP: great business for the shareholders

    Shell: yes - never had it soo good.

    EXXON: wow so much money for so little...

    Why blame OPEC? surely the 'multinational' oil companies have demonstrated that they are not interested in expanding their production capacity either?

    oh yes - they are not completely owned by the arabs.... - sorry I got it now - silly me!

    Does this mean that OPEC are terrorists because they are undermining the wealth building western civilization? So we now have a good reason to go to war then?

  58. Graham Dawson
    Coat

    @Joss Attridge

    Would you believe, I typed in "Nelson", stared at it for a while and then thought "that can't be right"...

  59. Anonymous Coward
    Coat

    sexonomics

    In Sweden to go to prostitutes is illegal (but being one is not). The point is that paying for sex is illegal not selling sex. I was wondering what influence this has had on the Swedish sex 'market' so I had it explained to me by a Swedish girlfriend. Apparantly the current 'market' is heavily influenced by the constant supply of willing and able partners. This means that the availability of 'free' sex continues to make prostitution as a market relatively insignificant. There is ofcourse still a cost of sex but the economy of it is only indirectly monetary. Most of the cost seems to be social - but then there is plenty of social cost when it comes to prostitution as well. There is another cost which continues to go upwards and that is the cost related to peoples continuous expansion of sex toys. So anyone thinking that less whores means fewer sex toys on the market need to rethink their understanding of economy... As it would be foolish to think that the Swedes do not entertain their numerous sex exploits accompanied with accessories...

  60. chris Bronze badge
    Alert

    UK oil consumers will have no effect on global oil prices

    Does Gordon somehow believe that UK oil consumers will have any effect on global oil prices? The Global prices are the wholesale prices for crude unrefined oil. If he reduced the tax on fuel the oil companies wouldn't suddenly decide to raise prices to absorb his lost taxes, they are already making enough money to not bother!! UK oil consumption is a tiny fraction of the global market & hence profits.

  61. Robert Long
    Flame

    Market forces

    The hand of the markets is invisible for the simple reason that it does not exist.

    Every company that ever was incorporated wants only one goal: a monopoly. Usefully, for them, that's unavoidable. Of course, the difficult part for any individual company is to spot the exact moment when they go from having a chance at being the one that could get to that position to being one of the companies that gets squeezed out. If you can see that moment coming you can sell up to your richest competitor and scarper before they realise they don't need what you've got (see Yahoo and Microsoft for an example of this sort of manoeuvring).

    All free markets must fall into the singlarity that is monopoly. All free markets ultimately fail in the function we want of them: providing services and goods at a price which optimises what society as a whole can create with the given amount of work units available. Of course, some economists refuse to recognise even the existance of society. They tend to be the most useless ones (out of a fairly useless bunch) and are largely responsible for the tediously obvious cycles of boom and bust we go through decade after decade.

    Markets need regulated. Humans have tried for thousands of years to do without regulation from time to time, but it has never worked and never will. The failure of over regulation is used as the justification for this stupidity, but it's not a binary issue; you have to have some regulation, you don't have to have total regulation and control.

    Similarly, some things MUST be nationalised: water, electricity, health, transport, defense. These things are vital to the nation and can not be left in the hands of the sort of drug-swilling morons who represent the cream of The City's financial elite.

    We see it in the Post Office: we are told that loss-making branches have to be closed. Here's a shock news item for all the free-market retards out there: we don't HAVE post offices to make a profit, we have them to provide a service. This sort of idiotic "privitise everything and let the market sort it out" fantasy is simply ruining the country. I don't drive around in my car and then scrap it because I've not made a profit on it; I need it's functionality just as the country needs the PO's functionality and needs a decent railway system. Private companies don't need these things - they just need profit. In a "free" market the nation loses out every time when its needs do not line up with the City's needs - which is almost always.

    We need a lot less philosophical economics nailed to dreamland ideals and more goddamned practical thinking about what WORKS.

  62. Eduard Coli
    Thumb Down

    Oil whores

    Nice article this but a couple of problems.

    As with articles of this genre they seem to tippy-toe around capitalism.

    It would seem that in capitalism it should be a rare thing where you can claim both record prices for raw material and have minimal infrastructure investment and then also report record profits not only for your industry but in the history of industrialization.

    If you accept that the oil cartels selling petrol in country are operating as a monopoly price fixing and what not then that works. But they claim they are not and are not so if you believe the bastards then so be it.

    The fact still remains that if your production and/or raw material costs go up and you pass your costs onto your customers then they should buy less and you should make less not more.

  63. MYOFB

    It's All a Matter of Personal Economics . . .

    . . . For the Masses that is!

    I've read all the posts on this topic (59 when I started reading and writing) and there are merits and de-merits (and humour) to be found in all of them . . . including this one!!

    Just to set the tempo . . .

    1. I have lived within walking distance of where I work/have worked.

    2. I have lived within cycling distance of where I work/have worked.

    3. I have lived within public transport distance of where I work/have worked.

    4. I have lived within personal car distance of where I work/have worked.

    I can hear the loud cry from you as I write . . . "Haven't we all!!"

    Yes, we all have but re-read the title of this post . . . and read on!!

    Where I used to work, it didn't make a difference what 'mode' of transport I utilised. Whichever I chose to use would take the same length of time and 'cost' either in time or money.

    Where I work now is 4 times the distance as where I used to work but I cannot walk or cycle there because 28 miles is way beyond me (and many others reading this) via that mode of transportation.

    So, like many of you, I am left with the option of using public transport or my personal car.

    I have commuted to work and back by public transport on many occasions, most recently today.

    I truly don't mind having to go out an hour earlier in the morning and arrive home an hour and a half later in the evening, using public transport . . .

    . . . BUT . . .

    It's All a Matter of Personal Economics . . . I can't afford the cost of doing so.

    It costs twice as much in monetary terms (which I don't have) and more than twice as much in time (which I am prepared to give) to do so.

    As 'Mike VandeVelde' made clear in his earlier post . . . Please read it again . . .

    . . . In essence, we all have to cut our cloth according to our means, and then some (with which I agree) but it really sticks in all our throats when we read about the "John Lewis" list!!

    I apologise if that sounds political, I didn't want to get into politics but as I have arrived at that juncture, it may well be in all our interests to decide . . .

    . . .

    1. "We feel our country is best served by . . ."

    2. "In the interests of national security . . . "

    3. "WoMD have been found (er, will be found some time soon) . . .

    4. Add your own comment . . . if you can be arsed!!

    Personally, I think we can best serve our country, in the not too distant future, by demanding our country be run by a coalition of the three polictical parties we have . . .

    The caveat being . . . "You can squabble between yourselves as much as you want BUT you will be ultimately be responsible and answerable to . . .

    US, the 'Common People'!!

  64. heystoopid
    Flame

    Nice

    Nice , to see poor Gordon and his fellow band of 419ers lose their last intact single live brain cell to commit total political suicide and take a running leap into the political abyss of no return !

    Let the expensive oil flames start toasting that which remains !

  65. Anonymous Coward
    Happy

    LP GAS

    Don't you people have LPG for cars over in the old country?

    I pay the equivalent of 35p ($aust 0.67c/litre) for LPG, use 1/3 more than petrol, but my 2 ton 4.0litre six cylinder Falcon gets the equivalent petrol fuel economy of 40MPG!

    In OZ LPG is available at nearly every Service station.

  66. Flocke Kroes Silver badge

    Why not get to work in a 4x4 full of concrete towing an empty bus?

    Every weekday I walk past a queue of cars each carrying one person. About once per week I see a motorcyclist. I am sure many of the car drivers need a car once or twice a week, but it is cheaper to use a car all the time than to tax and insure two vehicles.

    If Mr Brown wants to reduce fuel prices, he has to reduce demand. If you could switch your tax disk back and fourth between a car and a bike, I am sure the insurance companies would offer competitive a deal.

    BTW, if you think oil managed by OPEC is a problem, just image how bad it would be with Gordon in charge.

  67. Tony Paulazzo
    Coat

    It's all good...

    Glad there are so many right headed thinkers reading these boards, shame the other 99% of the UK population (including politicians, economists, the media etc etc etc), don't seem to see it.

    Gordon Brown, if you want to stay in office, drop 10p tax on every litre of fuel - immediately. Stop passing ridiculous laws and and make banks take responsibility for their actions. And above all, remember, you're supposed to work for us, not the big profiteering companies.

    Coat - time to get off this rock.

  68. Ferry Boat

    @MYOFB

    <quote>

    "Personally, I think we can best serve our country, in the not too distant future, by demanding our country be run by a coalition of the three polictical parties we have . . .

    The caveat being . . . "You can squabble between yourselves as much as you want BUT you will be ultimately be responsible and answerable to . . .

    US, the 'Common People'!!"

    </quote>

    How would they be accountable if we can't vote them out? Which is implied in what you say. You are on the right lines though. If you want anything long term done then democracy is not the best form of leadership to achieve it. Maximum term lengths mean the government always has an eye on getting in next time and they'll do anything to achieve that, especially towards the end of the term. Anyway the government is already answerable to the US.

  69. Dick Emery
    Unhappy

    The little places get hit hardest

    Me and my family just took a short break on the Isle of White. At on small station the price of diesel was 139.99 per liter with unleaded not far behind it. I kid you not.

  70. Anonymous Coward
    Pirate

    @MYFOB

    Don't apologise for making it political ...

    You do realise that you are suggesting a one party state : ) Limited checks and balances etc. Not that I approve of the political feedback mechanisms we have at the moment myself. (party politics <spit>)

    Which is why I advocate descending on the lower house with scythes and flaming torches. Thats the one feedback mechanism they will take notice of.

    @Tony Paulazzo - LOL .. 10p off, Gordon can't actually do that, he has very little wriggle room.

    Sooooo ... who is for a new top rate of tax for super earners. New laws to make tax evasion an imprisonable offence. A law on corporate manslaughter. And with the wealth created raising the minimum wage and massively hiking the lowest tax threashold. Say to something reasonable like 14k.

    Now there are some policies that are worth fighting for. Trouble is "socialism" is a dirty word nowadays, but I'm just going to start calling it "doing the fucking obvious". I also think the cost of doing business in this country is to cheap, how come with some of the lowest capital gains tax and business tax rates in Europe we still have some of the highest prices in Europe. Someone is laughing all the way to the bank, and I tell you now, its not me.

    Now wheres that scythe.

    P.S. Oh yeah, time to re-invade Jersey and burn down every corporate office you can find. Like the place should be a buccolic bit of greenery like Sark, not an off shore haven for excess profit and unreported wealth.

  71. shay mclachlan

    If....

    If Gordon Brown insists on having the second highest petrol taxes in the world he can hardly start blaming johnny foreigner for his woes if fuel prices go pearshaped and the public gets arsy..

  72. Anonymous Coward
    Anonymous Coward

    The price of a post office..

    >free-market retards out there:

    I guess that'll be me..

    >we don't HAVE post offices to make a profit

    Evidently, since they don't. They used to have the benefit of a cross subsidy in the form of government leaflets, pensions etc. That was taken away because people want a more efficient government, and so the post offices are no longer viable.

    Now, if they are still required the people who require them should pick up the tab.

    You see this all over the place, a post office run like a local shop is going bust because the people who complain loudest about it being shut down are shopping at the giant tescos a billion miles away because it's cheaper.

    Bafflingly they want me to pay for it, via taxation, effectively paying 20% more - as the cost of capital via taxation. When I don't give a shit about the sodding things.

    After repeated highly visible failures of demand economies, how come there are so many witless idiots that want to live in one?

  73. Slaine
    Boffin

    after "Register also pretty short on great economists"

    I noticed, reading on after that comment, that a large number of very well informed amateur economists (amateur in so far as they are not paid to think in such a way, not as a term of abuse) have surfaced. The stories are much the same. As individuals we are all bound by our "personal economic circumstances" and as such will react in such a way as to best serve our personal situation. So, I thought I would share with you the benefit of being brought up by an economics teacher...

    Supply and Demand. Technically supply and demand will tend towards each other. Supplying too much will result in glut or waste, necessitate a reduction of prices (to shift stock) and result in an increase in demand. If supply is less than demand, demand for the scarce goods will push up prices (as people outbid each other - see house prices) and thus either make it more profitable to supply more or, in the case of limited resources, push demand into alternatives (okay then, so petrol at high price WILL reduce demand, people WILL walk or tolerate buses or riot - THAT's economics). What happens when there is a supply of things you actually don't want? Well that's where advertising comes in. What happens when there is a lack of things you do want? That's where the Black Market comes in.

    There are 3 types of demand.

    1: Elastic - a small change in price results in a large change in demand. The potential for enhanced profit is realised by reducing prices by "x" and seeing an increase in demand of 2, 3, 4 times "x". This is often due to there being close "alternatives" available. Think Pork (as only politicians can), if the price of pigs goes down - everyone considers switching from Chicken and Beef.

    2: Inelastic - a large change in price results in only a small change in demand. The potential for enhanced profit is realised by increasing prices because, in technical terms, the bastards have got you by the short and curlies. The classic examples are bread and fuel. You CAN'T live without them (Go on, say, "let them eat cake").

    3: Unit (as in Unit Elasticity) - a rare and wonderful halfway in which no matter what price you charge for something, demand will change in such a way that the same is spent regardless. There are very few examples. Ironically, cannabis is recognised as one of the best... and it is this "unit elasticity" that proves, beyond any doubt, that dope is non addictive.

    However, that doesn't stop dopes like Norbert Grimshaw Brawn from worming themselves into politics. The demand for government agency places is extremely low and requires an applicant to be psychotically driven to "power" (a euphemism for "mentally divergent and unstable"), so in order to fill the supply of government positions, the value has needed to be dropped to rock bottom and the rewards pushed through the roof. That's how the biggest phukwit on this side of sea level became Chancellor, and then PM.

    Finally, there is "Opportunity Cost", something that the cretins in Whitehall have completely overlooked. The Opportunity Cost of a gallon (ah, sorry we went to litres when it got too expensive, it will be pints, cups or thimbles next) is all those things that you could have spent the money on, if you hadn't spent it on fuel for your car (the bus, train, a new bicycle, jogging shoes etc). It should not be long now before the Opportunity Cost of going to work outstrips the financial reward of going there.

  74. Anonymous Coward
    Anonymous Coward

    Hellsteeth

    Again he says they are not pumping enough oil. Hey Gordy, what about your leacherous, undeserved Duty and VAT?

    If the oil cos. reduce prices, dilute prices by pumping more oil then your pensions and investments are gonna take a nose dive.

    No the oil cos. don't need to pump more, parasitical government tax MUST be reduced or removed. Oh and if he starts spouting about NHS and cuts etc like he did the last time, remind him that only a compete fucking baffoon runs so many services on NON RENEWABLE income.

  75. Mark
    Alert

    Magnificent..

    How those elected representatives of ours are so intelligent, that they allowed such a fucktard with such a fundamental lack of understanding of global economics to be chancellor.

  76. Mark SPLINTER
    Dead Vulture

    Shhh... there's a war on

    I would like to congratulate the readers of the Register for almost completely ignoring the fact that there is an illegal war happening on top of most of the oil, Putin owns the rest of it, and the US won't raise production in its own back yard because of the "envirument".

    Keep mumbling crap about getting the kids to Tesco's and back. At least your kids still have legs to walk on, due to the lack of clusterbombs in their school playground.

  77. Anonymous Coward
    Stop

    Price of oil < price of bottled water

    Stop whining.

    I wouldn't mind but I doubt any of the people posting have done anything remotely political in their lives. Carry on putting into your pension fund and doffing your cap, thats all your good for.

  78. Matthew

    We're still far from peak oil

    http://www.marketoracle.co.uk/Article4793.html

  79. Anonymous Coward
    Paris Hilton

    @sexonomics AC

    "continuous expansion of sex toys" -- snigger...

    Paris for obvious reasons.

  80. SpitefulGOD
    Gates Halo

    BS

    I don't see OPEC taking 70% on its products, the government cried outrage when the oil produces made profit although they've taken more than all of them put together, what a fucking joke.

  81. Steven Pepperell
    Joke

    $135 a barrel...

    ...and thats cutting me own throat

    Wait a sec this is 2008....where is my damn hoverboard!!!!!

    Joining Virgle is looking very appealing right now

  82. Frederick Karno
    Unhappy

    Major fail

    Its far more complex than just blaming the oil price.Years of dithering over a future energy needs program has left the UK at the mercy of overseas energy firms who subsidise fuel prices in their own countries with the British cash cow.

    Governments are in place to make decisions for the good of us all our present one continues to stick its head in the sand and hope the problems will go away while milking more revenue from the increased prices.

    It is only when we all get hit that we sit up and take notice.If a government was competent they know how much they need from fuel duty and should have a set rate so the price rises would be just about fuel costs,Instead of what we see now a price rise enhanced by percentage tax rises.

  83. Richard
    Stop

    Supply/Demand

    Of course there's a shortage; the author's lack of incite into basic economics is astonishing. The question is whether OPEC is actually capable of pumping substantially more of the kind of the crude that we need or are we already at peak flow.

    And to the foolish comments pining for a reduction in fuel duty: where should the money be spirited from in order to pay for our schools, hospitals, Welfare State etc? A hike in income tax perhaps? From recent experience I think we know how popular that would be.

    Personally, I think petrol on the forecourt (for private cars) is still far too cheap; now if there was a way to offer discounts to hauliers and rural folk who need their cars to get around, I would be happy to see a doubling of petrol/DERV prices for us spoiled urbanites whose cars are often (but not always) an unnecessary luxury.

  84. Simon Ward
    Thumb Down

    RE: LP GAS

    "Don't you people have LPG for cars over in the old country?"

    Yes, yes we do.

    If you can get over the relative lack of availability then you've got to contend with the iniquitous cost of having a suitable conversion done. I was quoted just shy of 2 grand to have an LPG conversion done on my 10yo Clio - given that I bought the thing for £1600 (and now worth less due to depreciation) even Grabbin' Gordon would understand that it's not economically viable.

    With a bit of luck, my next mottah will be dual-fuel.

  85. Robert Long
    Flame

    @JonB

    "Bafflingly they want me to pay for it, via taxation, effectively paying 20% more - as the cost of capital via taxation. When I don't give a shit about the sodding things."

    Well, then, take a hike. No one's stopping you - there's plenty of ports and airports you can use. If you want to live on a desert island where you don't have to pay anyone for anything you don't want done then fine. Wasters like you are only a drag on the rest of us anyway.

    While you're leaving, do be careful not to drive on more road than your lifetime's road tax would cover, by the way. You wouldn't want to compromise your pinciples and participate in society, would you? That should get you about half a mile towards the airport; you can walk the rest of the way so long as you don't use any footpath the rest of us paid for.

    Cretin.

  86. Mike

    What is plan B then?

    There's a fundamental flaw in the plan though. You say that the price rise will drive us off of fossil fuels and onto... what, exactly? We don't have our new super-green fuel developed yet... and even if it were, how long will it take to roll out worldwide so we can start driving our eco-friendly vehicles safe in the knowledge that there's a refilling point within 100 miles of our current location?

    "Oh it'll be here soon" some of the bunny-huggers cry: why is that then? OPEC aren't exactly worried about finding the alternative for their black gold: after all, we've allowed them to charge double for the same amount of stock, so they're not losing out - in fact it suits them cos they can bleed the maximum cash out of their stocks. Why would they turn their back on the oil so they can push out a much cheaper substitute with lower profit margins?

    No, there's no point kidding us we should be grateful they're charging us through the nose - there's no benefit to the consumer/world from this. The only people who benefit are HMG, and the Exxon board of directors.

    Oh, and incidentally, I thought Alistair "Captain" Darling was in charge of the purse strings now, not Laird Broon?

  87. Chris Cheale

    oil isn't just fuel

    remember folks - this wonderful oil stuff ain't just used for fuel, but plastics as well. As plastics are in virtually everything, rising oil prices mean that virtually everything becomes more expensive.

    It's just we're uber-shafted at the petrol pumps because of the huge amount of tax there - there's about as much tax on petrol as there is on fags [cigarettes for our US counterparts] and booze. Personally I'd love it if all the smokers (myself included) simultaneously quit... watch the petrol prices soar as the gov finds a £13billion tax shortage.

    ----

    I wouldn't mind but I doubt any of the people posting have done anything remotely political in their lives.

    ----

    yes - because doing something political in this country makes soooo much difference; apart from possibly getting you a criminal record for participating in an "illegal gathering".

    This country needs a radical political shake-up, the quasi-democracy we have just isn't working. People only vote on two things, self-interest and spin. Unfortunately, sometimes that which benefits the country/society/environment as a whole will be universally unpopular and will therefore not feature into the policies of any political party.

    If only benevolent dictatorship wasn't a practical contradiction in terms.

  88. Anonymous Coward
    Anonymous Coward

    I blame Marx

    "His first blooper is the claim that there is some imbalance between supply and demand: of course there isn't, how can anyone be quite so silly?"

    Easily, if he is an unreconstructed Stalinist who still believes all that garbage preached by Karl Marx. (At least when Groucho talked nonsense, he did it on purpose to amuse us).

    In Pa Broon's universe, he dictates prices (along with everything else). Fortunately, the signs predict that Pa Broon's universe and ours will shortly start to diverge, leaving ours a great deal saner.

  89. Russell Blandamer
    Flame

    I know El Reg likes to provoke debate, but this really is too much.

    "His first blooper is the claim that there is some imbalance between supply and demand: of course there isn't, how can anyone be quite so silly?"

    What absolute drivel. Tim Worstall shows a total lack of understanding of basic market principles here, and frankly I'm astonished that someone like him doesn't know better. Differences in supply and demand are the fundamental driver for all free markets, and I like to think the average Reg reader is savvy enough to realise that.

    And "we've probably already reached the limit of what UK consumers are prepared to pay in tax upon oil and oil based products"? Is he suggesting that if petrol becomes any more expensive then we'll all just go into a sulk and refuse to fill our cars up? "Can't come into the office today, petrol's got too pricey" is an excuse that your boss probably won't take too well.

    Whilst I agree with the thrust of the article -- that there is a stong environmental case for pricing people off the road -- there has to be a sensible, affordable alternative method of getting where you need to go. I wouldn't mind betting Tim Worstall lives in a well-connected part of the South East, but I live in rural Somerset, 15 miles from the nearest railway station. I work on the outskirts of Bristol: 25 minutes' walk from the station at the other end. So my alternatives are either to spend 4 hours a day on public transport and not see my kids all week, or move closer to work, which I can't afford because house prices are astronomical.

    So what do we do? Reinstate the old local railways? Not easy: much of the land's been sold off and turned into housing estates. Introduce new bus services? Well, even if Fist Bus was prepared to run a decent service from my village, it would still take forever because the roads in this country are so bad. Work from home? Well, yes, that might work for some people, but if your job is assembling circuit boards then it's not an option. Drive less polluting vehicles? Sounds great, but where are they? I can't get my hands on a fuel cell powered car even though the technology exists.

    We've known for decades that the world's oil supply is finite and we're shafting the planet by burning it. I was made painfully aware of that as a schoolkid in the 80s. Why is it then that, 20 years on, we are still finding it so hard to develop an alternative? I suspect it has a lot to do with the oil companies and car manufacturers being unwilling to jeopardise their vested interests, and the government being unwilling to invest in public transport because it won't produce a visible return. There's not a huge amount that the average Brit can do about that, really, but if the NIMBYs would think twice before objecting to new wind farms, and the office workers shut down their PCs at the end of the day, and the train companies stopped taking the mick with their ticket prices, it might just be a start.

  90. Anonymous Coward
    Anonymous Coward

    @Robert Long

    > You wouldn't want to compromise your pinciples and participate in society, would you?

    You misunderstand, I do participate in society, you are the one who apparently wants anyone who prefers to spend their own money rather than entrusting the government to do it should be shipped off to some desert island.

    What gives you the impression that I take more from society than I give? I've paid everything demanded of me and broken no laws. The many people who are in that position are the contributors.

    Are you so stupid that you feel that the only way to safely spend your money is to get someone else to do it for you?

    Back on the fuel and taxation topic, money could be saved by ditching road tax completely and regaining the excess tax from fuel. The reduction in administration should result in a net saving. Although bad for angry Bob's post offices of course.

  91. Suburban Inmate
    Go

    Personal Economics - Devil's advocate

    The train network, all of a sudden (it seems to me, anyway) has become, well, affordable! It's dropped below the price of petrol to get from Brum to London in a car (VW Golf GTi Mk2 1.8L 8v, cruising 85mph on an empty M6) even when I take a taxi to the station.

    www.nationalrail.co.uk - check ticket prices for a range of dates and times. I could have booked a midday Tuesday train from Brum to London for £7.25, using a Young Person's railcard. I could go right now for £11.80. Even without the railcard you'd be hard pushed to drive it on that amount of fuel. Then factor in road tax and insurance and vehicle purchase/maintainance and the stress of those monumental cretins doing 70-odd in the overtaking lane and oblivious to the exodus of undertakers to the left of them. They make me want to kill!

    Seriously, check the single fares for journeys you make. You can leave the car, save money, and read a book or bash away on your laptop. Oh and help save the planet, if you give a crap about all that. I don't, cos I don't and won't have kids.

  92. Stef
    Flame

    £1.10 a litre

    Get real - that's incredibly cheap - even chavopops cost more than that!

  93. Anonymous Coward
    Anonymous Coward

    @Chris Cheale

    Meaningful change happens when people threaten the state. Welcome to the history of the world.

    Stand out, step up or tug your forelock. In years to come you will take some pride in that criminal record. I note the Torys removed the right to congregate, that a NuLab government in all these years has not altered this sorry state says everything about the supposed choice in our electoral system and the relative level of freedom we are allowed.

    @Russell Blandamer - come on .. really, are we back to blaming Beaching? Move to a city and buy a bike. One good aspect to this is that commuters will become a dying breed, city dwellers have a vastly smaller environmental footprint, just through economies of scale. Of course not having a few tons of steel/aluminum sitting on the drive helps as well.

    @Suburban Inmate - good point, especially about the arseholes doing 70 in the outside lane. The law abiding cretins.

  94. Anonymous Coward
    Anonymous Coward

    food, farmers, oil

    I pretty much agree with the article, well said!

    I personally think that high oil prices are a good thing, even for the cost of food and oft quoted farmers. Surely high oil prices are a good thing for local farmers, as the price of goods is passed on to the consumer, but the net effect is we will be buying more local produce than (say) apples from New Zealand as the higher the oil price the cheaper local produce becomes (relatively).

    The main reason food in Supermarkets goes up is because so much oil is used to deliver the food. If there was pressure on shops to source more locally then oil price rises would not affect food prices so much, again a good thing. There seems to be a lot of potential benefits here for the planet and people's environment (e.g. less trucks on the roads).

    Maybe my economics is too simple, but I wish politicians could take some bigger picture rather than just goin along with the public "common sense" approach, that seems so obviously flawed to me.

  95. Mark

    Oil up per barrel

    Wondering, though. What has the price of oil done in terms of price in GBP? How about in terms of euros?

    Like the XO, originally set to get to $100 (120e) now going for $200 (130e). OMFG!!! Doubled!!!

    So how HAS the price of oil gone up in GBP? And how does that square with the price of oil at the stations in GBP?

  96. Matthew

    Hmm

    Too many incomplete arguments here:

    Personal Economics - Is only part of the explanation. As the cost of commuting increases, it is of less benefit to me (Salary - Commuting Cost = Benefit). When the equation reaches the point that I'm no longer prepared to commute (Perception of Benefit < Effort) then the employer will lose my services and has to raise the salary. If I'm not prepared to work at that rate there is a (very small) reduction in supply of my skills creating upward pressure on price. Employers will end up having to move closer to where their supply of skills are located, until the equation balances.

    Scarcity - Oil is being pumped at the highest rates ever, faster than growth in demand (in the short-term), therefore, where is all this oil going? I suspect that there are a lot of tankers full to the brim sitting in the Persian Gulf.

  97. Russell Blandamer
    Happy

    @Stef

    "Get real - that's incredibly cheap - even chavopops cost more than that!"

    Do you drink 15 litres of Bacardi Breezer a day, though?

  98. Slaine
    Paris Hilton

    Do you drink 15 litres of Bacardi Breezer a day

    Nope - but I know a Sith Welshman who claims he can.

    @ Chris Cheale: You've been reading my earlier comments or are we just clones? "Pharmaceuticals" is the scary one you seem to have overlooked. Easily done though, given the enormous list of things that we cannot make without the black sticky stuff (and no, I don't mean [black, sticky stuff], I mean [black sticky stuff]).

    Icon - because lets face it, if she doesn't fly here to visit me, I can't afford the fare to go and see her. Bow and welcome "la revolution", the summer riots are brewing and we're all gonna have to get there on foot or bicycles.

    PS - The removal of "the right to congregate (in numbers greater than 5 BTW) by Her Maj's government (must come up with a more derogatory term for that, how about "the lizard majority") is in direct contravention of Article 20(1): "Everyone has the right to freedom of peaceful assembly and association", and to prevent such an activity is in contravention of Articles 4, 5, 7 and especially 9: "No one shall be subjected to arbitrary arrest, detention or exile", plus to a lesser extent, Articles 12, 13(1), 19 and in closing I would just like to add Article 30: "Nothing in this Declaration may be interpreted as implying for any State, group or person any right to engage in any activity or to perform any act aimed at the destruction of any of the rights and freedoms set forth herein"

  99. Rod Campbell-Ross

    ‘The economy: A big Arab did it and ran away, claims PM’

    Great article! One of the few I have read that makes sense and where it is clear the author as actually done some research and understands the issues.

    And yes, Brown is an idiot. I have never liked the man. He does not deserve to be PM with such a limited understanding of oil production. Mind you, our PM is no better. Ignorance and indifference sums up the attitude of both of them.

  100. SpitefulGOD
    Gates Halo

    @Richard

    And to the foolish comments pining for a reduction in fuel duty: where should the money be spirited from in order to pay for our schools, hospitals, Welfare State etc? A hike in income tax perhaps? From recent experience I think we know how popular that would be.

    A few of those 50" plasmas taken off of jobless might help, and then back to food stamps and unmarked tins of food.

  101. Degenerate Scumbag

    Cheap and Decent Whores

    That shortage has been solved over recent years by importing large numbers from Eastern Europe.

    Perhaps Mr Brown should be mending our fences with Russia's new premiere.

  102. Joe
    Black Helicopters

    Anyone ever thought about Brazil and biofuel cars?

    If you look at Brazil, they actually get to choose which fuel goes in their cars. All you need is a push to get started in the right direction.

    Great video on C-SPAN explains it fairly well.

    http://www.c-spanarchives.org/library/index.php?main_page=product_video_info&products_id=200600-1

    If that link does not work due to all the contorted stuff after the php, follow the link to the C-SPAN video from here (shorter URL):

    http://www.energyvictory.net/

  103. Anonymous Coward
    Flame

    Socialism sucks

    Brown Bottom is not fit to soil our shoes with its stinkiness.

    Global warming is not caused by humans, we are insignificant compared to the awesome power of nature, the model backed predictions are worthless, they don't even match the past or the present, in time and space, as many honest climate scientists have shown. We may see a little extra natural warming, due to the Solar cycle, but nothing like as bad as predicted by this modern day offal divination.

    Socialist big government and massive fraudulent fractional reserve banking (allowed by governments) causes gross excess money supply, this grossly devalues our money, so that manufacturers and producers had little choice but to increase their prices to maintain their buying power, thus compound inflation. Our manufacturing is being driven offshore by insane business taxation, so we don't have enough wealth flowing in to pay for the higher import prices.

    Read "The Grip of Death" already!

    2. There is plenty of oil in the ground, there is no peak oil in sight yet, however many existing producers are unwisely neglecting their oil fields, so their production is dropping. New wells need massive amounts of money and at least 7 years to set-up, so other producers have to struggle to make up the difference until new production can be brought on-line.

    3. Our profligate Marxist Socialist UK government thinks that it is perfectly fine to cream off the majority of the oil price as a percentage tax, so that the government sees a much bigger increase in fuel tax revenue that the supplier sees in their slim increased profit, for all oil price rises.

    The whole stinking mess is the fault of Socialism, bogus 'Universal Morality', 'Keynesian Economics' and lots of greedy amoral thieves, who call themselves Politicians, Royalty and bankers.

  104. michael

    @AC

    "2. There is plenty of oil in the ground, there is no peak oil in sight yet, however many existing producers are unwisely neglecting their oil fields, so their production is dropping. New wells need massive amounts of money and at least 7 years to set-up, so other producers have to struggle to make up the difference until new production can be brought on-line."

    that is the defnitnation of peek oil plenty in round not enought comming up

  105. Craig Taylor

    Even in the Mother Country?

    Politicians pandering to the voters by grandstanding as "defenders of the people's way of life"? Is this England or the USA? Heavens!

    It is nice to know that if you corner an elected politician, of any nationality, they all fall back to the basics of demagoguery. "Theres a baddy out there and we aren't going to let him harm MY folks!" No sir. I'll talk him to death. Yep.

    Sigh. Not only in America.

    Craig

  106. Slaine

    which is more sad

    option 1 - That Gordon Brown might actually believe that the current economic collapse is a direct result solely of the price of oil dictated by OPEC nations and not instead a logical progression after the removal of house prices from the calculation of inflation, exacerbated by systematic overspending and mismanagement of the rest of the economy for over a decade.

    option 2 - That not one person in this thread is remotely surprised to be told that he does.

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