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Tuesday, 11 July, 2000, 14:45 GMT 15:45 UK
Oil prices: Are they too high?
Saudi Arabia has announced it will increase its oil production in a bid to keep the price of crude down. They say they want to see the price of a barrel of oil at 25 dollars, down from the current price of 30 dollars per barrel.
Oil prices have trebled in the last 15 months, and the increases have quickly found their way to petrol pumps. Consumers in the US and the UK are up in arms about it and the pressure is mounting on politicians to do something to lower prices.
Saudi officials fear that unless prices come down, customers could start switching to other fuels. But would this be such a bad thing? After all, it was the oil crises of the 1970s that gave us fuel-efficient cars.
Could this price hike encourage investment and research into other forms of energy? Or should Western governments be doing all they can to keep oil prices low?
This debate is now closed. Read a selection of your comments below.
Helen Sharratt, Canada
If Labour, Conservatives or any other party want to win an election all they have to do is cut 30% tax off prices at the pump.
I am a woman with three children under 5 years old, living in the countryside where public transport is virtually non-existent. I am also married to a disabled person who finds it physically impossible to get onto a bus or train. I would like to ask Tony Blair when he plans on giving disabled people some kind of subsidy on their petrol prices as they are unable to use any alternative. It is all very well making my husband feel bad for not working (not his fault) but if you take away his only means of transport, how on earth is he supposed to FIND work? If the Government refuses to drop the price of petrol, they must seriously consider some sort of subsidy for disabled/ elderly people and those who live in the country!
Until alternative energy sources are widely available, petrol prices should be kept to an affordable level. These kind of prices are nothing short of hijacking and ransom!
I ride a motorbike which uses less fuel than a car and takes up less road space. If the Government was serious about reducing pollution it would be promoting this mode of transport. Sadly though it looks as if it is yet again just another way of raising extra revenue.
The complaints about the high cost of fuel result from the separation of work and home. If more people could work and live in the same building, the need for transport would be reduced. I have lived and worked a few times in the same building and it saves a lot of time being able to travel to work just using the elevator. Building codes could be changed to encourage multi-use buildings and reduce the need for transport.
I would like to see more support for cycling to work, not only in terms of infrastructure, but businesses need to provide cycle parking, lockers for changing as well as showers wherever possible.
People say UK oil prices should be as low as they are in America. They're forgetting that the US produces a third of all the pollution in the world, much of it from that "wonderfully cheap" US gasoline.
The UK is fast becoming a joke in Europe. We pay more for just about everything, we are taxed to the hilt and to cap it all, we earn less than most other developed countries. The petrol tax is just plain outrageous. I took the easy route, I left the country.
Those who complain about the tax on fuel and demand that it be brought in to line with other European countries need to consider one important aspect of their demand.
Other European countries manage to keep their prices low by taxing single people at up to 50%. Thus, they pay for the high level of health spending and pensions that we demand our government pay for.
I have just returned from a holiday in France, and every petrol station sold liquid petrolium gas at a price of about 30p per litre. When will the UK Government encourage the sale of clean fuels?? I say keep petrol prices high but introduce cleaner fuels.
I fail to see why cyclists escape taxation. They use the road, their bikes are made from metal and rubber, and they generally have little or no insurance.
We can hardly expect the OPEC countries to keep prices low when they see Western governments piling on taxes which equate to up to ten times or more what the producers get for crude.
The surprising thing is that the crude price is not $100 or $200 per barrel instead of £25 or $30.
I am another person who will be DUMPING THE PUMPS on 1st August. Why is our fuel cost comprised of 75% tax and where does this money go? Yet another indirect tax that is so much lower in the rest of the world. Why do we put up with it in the UK?
A number of respondents have stated that people should live closer to work. For most people, this would mean moving house every time they change jobs. Also, moving closer to your workplace often means moving further away from family, friends, schools and your spouse's place of work, so this is hardly a practical suggestion. High transport costs are in no small way responsible for the recent boom in the housing market as well.
I'm fed up with people whining about petrol prices. It seems that most cars I see on the road only have one person in them and research shows that many trips are less than a mile. I've never owned a car and survive perfectly well walking, biking, taking the bus, train or taxi and if I need to go away at the weekend, I just rent a car.
I suspect a lot of car use is down to plain laziness. Perhaps if fewer people used their cars, fewer Americans (and alas increasingly Britons) would be so obese.
Vinny Parker, UK
Many people claim that they are forced to use a car to get around because of the poor public transport where they live. In this age of choice and the freedom to live wherever they want, perhaps they should move to an area where the public transport system is better - like close to town and city centres. It is the large suburban sprawl that is the South East that is at the root of the problem. The population density is not dense enough to sustain a decent, viable public transport system but dense enough to cause traffic congestion and environmental problems.
The car has given people the freedom to live further out of cities and we are now facing the consequences of this migration.
The Government seems to be missing a basic fact. A major contributor to economic success is MOBILITY, which still has to happen whatever fuel type is used. By making fuel more expensive, the economy suffers, which affects everyone.
Well, I was thinking of using public transport more, but now Mr Blair says that if I don't buy petrol and don't use my car then he'll have to sack teachers and nurses. Could he make up his mind, please?
The market in crude is not a free one. OPEC meet to discuss production quotas. They actually planned for this price increase. If they were private companies they would be locked up for it.
It is outrageous that Tony Blair is punishing motorists with excessive fuel prices in order to fund education and the NHS, which we all use. Why should motorists pay more for these services than others who drive fewer miles. I am all for improving health and education but we should all be paying for it via income tax.
Petrol is one of many things that are far too expensive in the UK, The government treats the public like mugs. If you work and pay your way to just get clobbered with more and more taxes, direct and indirect.
Gordon Brown should reduce fuel tax by at least 5p a litre. He could easily reclaim this (and more) by slapping an immediate tax on aviation fuel. The most environmentally destructive form of transport is still effectively being subsidised!
Alexander Pinkerton, Scotland
I bet the fuel companies are looking forward to the huge expense of adding an extra digit to their forecourt banners when fuel prices hit the 100p mark. Perhaps they should consider adding an extra digit whilst they are at it just in case this government win the next general election. When will we learn?
I live in a city which once had a comprehensive railway network reaching all the towns and villages from where thousands of motorists now drive to work here every day. Successive governments have, over the years, destroyed the public transport system which would have alleviated some of today's congestion. Perhaps the government should start thinking more about the future and stop trying to persuade us to use non-existent public transport whilst making car owners pay ridiculous amounts of taxation for the mess which they have got us into.
Two scenarios:1. Drop a pedestrian in the middle of London and tell him to find his way home. He can, probably within a couple of hours. 2. Drop a pedestrian in the middle of a field in the country and tell him to go home. Not possible within a couple of days. A bit contrived, but hopefully the people who think the high tax is a good idea will realise how difficult it is for those of us in the country to get around without the use of a car.
Simon Wilson, England
Petrol isn't priced highly enough! We pay at the pump now, but 15, 20 years down the line when climate change really kicks in, we will pay the balance in full. Folk in vulnerable countries such as Bangladesh will bear much of the cost for us, though they burn a fraction of the fossil fuel. Like all of us that travel, I know how poor public transport is. How dangerous cycling can be, and the pleasantries of city rush hour traffic. We need alternatives meeting all transport/energy needs, and we can start to provide them using this vast haul on petrol tax. That would only be fair.
It's about time the Government reduced the tax on petrol & diesel. I don't think they have any idea just how much bad feeling there is about this rip off in the UK yet again ! I would like to know if there is a way of putting pressure on the Government to take action NOW?
Another point about taxing people out of their cars and onto buses: 1 bus produces 125 times more pollution than 1 car (UK Government's figures). 1 UK bus holds at most 76 people. So a busload of people still produces 1.6 times as much pollution as 76 cars with one person in each.
The last time petrol prices shot up we were precipitated into a recession. Surely the same thing will happen again. If so the government should take action NOW to preserve jobs by cutting petrol taxes.
Well, as I started this whole debate, I thought I'd better
add my 2pence worth.
Firstly, as many of you have pointed out, there simply is no alternative
to the car for many people. Public transport will not get any better whilst
it's run by private companies for one simple reason : shareholders.
Secondly, the £38billion raised in tax off the motorist each year
*should* be put back in to the roads and transport infrastructure. As it is,
Tony Blair admitted last week that the tax raised from motorists is actually
propping up policing and the NHS.
Third, the suggestion
that lower fuel prices would increase traffic is ludicrous - traffic levels have been
increasing year on year despite high fuel prices, so lowering them will have
no effect on traffic levels - they will always rise.
Finally, Blair should take a leaf out of the American's book on
this one. Several states have now dropped the state fuel tax (around 28%)
in order to lower the price to the consumer until the underlying supply
cost goes down. The US government are taking it so seriously that they're
considering ditching the 18% federal tax too for the time being. Sadly, I don't
think that the moneygrabbing Labour government we're all suffering under
would ever consider the voters to be their number one priority. Instead, they're
simply interested in making a fat stack of cash for themselves, and then
hoarding it in the mistaken belief that it will win them the next
election. Well it's about time they stopped hoarding it, and started spending it
on policing, public transport, and the NHS.
How about some kind of action over housing to get people living closer to where they work instead of building more offices in the same towns - action on public transport to make it cheap and reliable and then we won't even want to drive to work!!
Approximately 30% of all car journeys involve running children to school and doing weekly shopping. If as in the US many more school busses were provided, with adequate supervised routes to ensure the safety of these services, many roads would be less congested, children would be safer, and emissions would be reduced. Large supermarkets should encourage home delivery or provide bus services to the public.
Richard Dawes, UK
It is people who chose to live in "non-urban environments" and must therefore commute long distances to work in their cars who are causing excessive oil consumption, polluting the air and, step by step, encouraging the government to pave England's countryside with tarmac. Reversing the trend will cause pain for these people. It must. They have to live closer to work.
Paul Yardley, England
If filling stations advertised their prices with the oil price and tax separated, eg Petrol 22p per litre, Tax 66p per litre, then it would bring home to everyone just how much this government is ripping us off.
Remember the last time the British people felt ripped off like this? The poll tax. Remember what that did for Mrs Thatcher, Mr Blair?
Having looked through all the responses, one question has not been asked - how can the government 'do something' about public transport ? The last government privatised the lot, so how can the likes of RailTrack, StageCoach, Connex be persuaded to build more track, lay on more services, buy new coaches etc.
Rail passenger numbers ARE rising, but this does not seem to produce the desired results. Should we re-nationalise the railways and buses? At least then they would be more controllable by government policy?
Pete Moore, UK
I travel 12 miles to work every day. By public transport, it would take an hour and a half and cost £5; by car it takes 25 minutes and costs about £1. Add that to the fact that my local bus service is full of rude drivers, abusive gangs of lads and people smoking heroin in the back seats, and you can understand why public transport is not my cup of tea at the moment. There is comic relief in this situation though - the Americans are up in arms at having to pay $2 a gallon - the scandal of it! They should be glad they're not forking out $6 a gallon instead.
Jon G, UK
Matt from Norway has some grand alternative ideas: Walk (for 15 miles to work? - For short journeys of a couple of miles or less, I frequently do), run (ditto), bike (in my suit? - good one), scooter, motorcycle (these burn fuel too), bus (one bus every hour), train (15 miles from home, 20 miles from work), tram (non-existent where I live), underground (also non-existent), river-taxi, ferry (I live nowhere near the river), park'n'ride (which involves driving), car-sharing, car-pools (detours to pick up other members rack up higher mileage than just going to work!). If the alternatives were viable, useable, reliable etc, I'd love to use them! Where I live there is NO ALTERNATIVE.
Tax on fuel is far too high in this country. Although I don't use the car unnecessarily I still need to fill up once a month. The cost has gone from £40 a month to nearly £70. That's just since the Labour government. I do try to cycle wherever possible, but with two young children and a lack of safe cycle paths, I find it difficult.
Al Priest, England
An earlier comment suggested that people should transfer from car to bus. However a typical bus emits about 125 times more PM10 particulates than a catalyst petrol car, and around 40 times more N0x. Particulates are carcinogenic and contribute to about 8000 deaths a year, and N0x contributes to acid rain and harmful ground-level ozone. This proves that taxing fuel to get people out of their cars and onto public transport for environmental reasons is ridiculous. The figures above are all from the Government's DETR website.
Murray, England ( ex NZ/USA)
We all know that in the UK we pay the highest prices for petrol in Europe. What is obscene is the suggestion that any reduction in tax will affect education and health care. Here we go again - the old political emotional blackmail. When will we as a people learn, at some point a government must keep its pledges.
G Jones, Europe
It is about time we come up with other forms of fuel other than petrol and diesel. Petroleum prices will continue to increase so long as it remains the only means through which we can meet our transportation needs. The fuel price situation here in Ghana is just too bad - prices are increased anyhow, anytime. If there is any other means of fuelling our cars, oil prices will drop and stabilise.
With the increasing fuel prices and the proliferation of internet technologies, we are heading for a society where no one leaves their home except the pizza delivery guys.
What real incentive does the UK Government have in reducing the cost of fuel, when they receive so much income from keeping the prices high? They will always blame those nasty Saudis for being so money grabbing!! What will happen now that production is going to be increased? Will the UK consumer see any, let alone significant, reduction in the cost at the pumps? In your dreams!!
Today there is more tax on a litre of petrol than the same litre cost four years ago. And that's before oil prices went through the roof. The main reason for the current (and future) prices is the government's money-addiction. And don't believe it's just Britain. Here in the Netherlands the treasury welcomes every price increase in Germany and Belgium. They can put up prices without more people going over the border to fill up.
J Ayres, UK
Fuel prices in the UK are ridiculous when compared with the rest of Europe. Even Ireland is 20p a litre cheaper (taking into account the exchange rate) and drivers from the north driving into the Republic can buy at these prices. The rest of us cannot. Its about time the government actually did something to help the majority of people with cars and businesses that rely on transport. If they cannot provide a decent public transport system they should not be preventing people from using their cars by constantly hiking the price.
Ever heard the term "captive market" Well that's what has happened to the travelling public in the UK. You run down public transport over a 30-40 year period, (close 8,000 miles of railway, rip out all the tram networks in your major cities). Build lots of roads and sell the idea to the British public of some motoring utopia, freedom, flexibility, etc, etc. Then when people have no alternative but to use the car, watch the millions roll in road and petrol tax. Rip off complete!
The UK pays far too much tax on fuel. The Labour government should cut this immediately to be in line with Europe. Give the lottery income over to the health service instead of crackpot schemes and we would have the best service in the world at no cost on taxes.
What price grid-locked cities, a depleted ozone layer and increased levels of asthma. Public service vehicles should be provided with tax-free fuel reducing the cost to the users and hopefully assisting the transfer from car to bus.
Anne Peck, UK
I think the Government should be forced to cut taxes on fuel. I live one and a half miles out of a village in a rural area and I have 2 children under 4. I do not have access to public transport and therefore need a car, but find it increasingly difficult to meet the running costs. Higher fuel prices hits those people who need cars the most - the elderly and disabled and those with young children.
Until there are some real alternatives to cars etc. what can we do?
The government should be reinvesting all the extra revenue from oil taxes into public transport and alternative fuels.
Mark Hull, UK
There's a lot talked about zero emission vehicles.
People should take a step back and realise how electricity is generated. Fossil fuels, or nuclear power are the only viable options at the moment. Only solar power is 'zero emission', and not really viable in the UK, is it?
If there is any merit in having a high pound surely it is that we can buy imports like crude oil more cheaply. This of course, should result in cheaper fuel costs to the consumer. In fact when compared to countries in the Euro zone we have the highest fuel bills. We have all the disadvantages of a high pound without the advantage of it in this regard.
Contrary to popular opinion - you are not forced to pay high prices for car fuel.
My car runs on LPG, which is half the cost of petrol and cleaner for the environment too.
We should do whatever it takes to put the motor car in mothballs so that we can all breathe fresh air.
If I had an alternative means of transport to get to and from work that was clean, convenient and inexpensive I would happily use it. Increasing the tax on petrol further would still make my car considerable cheaper than using the UK's slow and dirty rail network. Besides which, I wouldn't mind paying the present rate of petrol tax if I thought for a minute that it was being spent on improving roads, public transport or alternative clean fuel sources.
John Nevitt, UK
If anything the oil prices are far TOO LOW! Given the already visible impact of global climate change caused by the very wasteful use of fossil fuel in this country and elsewhere, there is clearly not sufficient incentive for oil to be used efficiently. Global climate change is the most important issue facing humanity and little else really matters when considered in comparison.
It's not the oil prices that are too high in this country, it is the tax which is nearly 800%. This is really making us feel the pinch. If cars were electric does that mean that our electricity bill would be subject to 800% tax?
I would love to be able to switch to an alternative fuel car and tell Mr Blair where he can put his duty on petrol, but I have yet to find a viable alternative except LPG and the conversions are expensive.
Gary Dale, England
What is a big contrast in the US is that prices rise and fall with the oil price but in the UK they just go up. Oil has been at its present price in the past 20 years but UK petrol at the pump was cheaper then. So the UK petrol price must be little to do with the price of oil and more to do with taxes and profit. The price of oil is not too high but its how it's controlled and taxed to the consumer you need to look at.
As a disabled driver I am pretty well restricted to using a car for my mobility so the hike in petrol prices is hurting badly. The government must reduce the tax burden before people like myself are crippled financially.
What hypocrisy! Yes, the government gives large cash incentives for car manufacturers to build cars here and wants us to buy cars but don't drive them! Or is that please drive them so that we get money from drivers.
I am happy that fewer people can afford to use their cars, I think more people should stop. It may be a slight inconvenience for people now but it will benefit people in the future.
I am sick to death with these people putting the price of fuel up in any other name that what it actually is, DAYLIGHT ROBBERY! it costs me nearly £60 to fill my tank up. WHAT IS WRONG WITH THIS PICTURE! It's time something is done.
It seems completely absurd to increase the price of petrol for cars given that these increases will force people to use a public transport system that is over expensive and out of date. The government seems to have got its message confused as to the desire for green transport and the need to generate revenue for the treasury.
I live in SW London When I last visited a friend who lives in a different part of SW London the train journey took 45 minutes. The taxi home took 7 minutes. In the face of this people will never stop using their cars!
Disgusting is all I can say! I understand that something needs to be done about the environment but this amount of tax is out of order. What exactly does this money get spent on? The millennium dome, garden parties for the Royals! Lets get our priorities right, if the taxes are increasing show us where the extra money is being spent!!
Don't get me wrong, I'm not a motoring evangelist (I bike to work), and the self-righteous pro-car brigade drive infuriate me. But not as much as a government who are taking the entire country for idiots.
Dave Topham, UK
The real cost of oil is bourne by those people whose lives and land are ruined by the politics of oil in Africa, Central/South America etc. See the story of Shell verses Ken Sirowara of Nigeria.
David Pancott, UK
What happened to the markets being left to run themselves, is that not the mantra of free market economists?
For me it highlights the double standards of market intervention.
For instance in many parts of the world, if not most the cost of many items such as drugs, are far too high. Why is there no 'intervention' to force the drugs companies to reduce the cost of medicines?
R Clarke UK
Why don't have less dependence on petrol? Why is the UK Government not supporting and encouraging more use of alternative fuel cars? Could it be because they can't meet their budget requirements unless they have the stealth tax of the petrol duty? Why is California so far ahead of the UK in electric vehicles? And why are the car companies so happy to tell us there is no demand for NICE (No Internal Combustion Engine) cars in the UK, when they are falling over themselves to develop zero-emission vehicles for the US?
Whatever the reasons behind the high price of petrol it must surely make us think about whether we need to use our cars for some journeys. It will probably also encourage people to buy cars with smaller engines. This can only be good news for the long term health of the nation.
Well I hate to buck the trend but I welcome anything that forces motorists to think twice before using the car. As a pedestrian living in a city centre the car brings nothing but misery and encourages laziness and environmental insensitivity. Oil is a finite resource and the sooner we switch to alternatives the better it will be for everyone.
Matt, Netherlands, ex UK
The fuel duty in this country is ridiculous. Either scrap annual road tax or keep fuel duties the same or reduce the tax on fuel. I do wish that Mr Blair would for once stop insulting the electorate's intelligence by claiming that schools and hospitals would be hit? Surely, the ambulances, day-care minibuses and school minibuses require fuel? Or is there a secret government alternative fuel for these vehicles?
If Blair is telling us that the NHS is funded by duty on petrol
then what will happen to our Health Service when we all leave our cars at
home and take public transport like Blair keeps telling us to do? Should we then smoke and drink more, as
I'm sure he'll tell us that if duty were cut on cigarettes and alcohol then the nurses won't get a pay rise.
All this talk of the euro - surely the core of the problem of inward investment is the high value of the pound? There are easier ways of lowering the pound than joining the euro!
Is this another example of faulty thinking diffused through the political and commercial world by government/commerce hysteria?
As long as people continue to buy cars that in North America only get 15-20 miles per gallon at best how can petrol be too expensive! I suggest that those that drive such inefficient cars pay even more per gallon for their fuel and those that drive smaller more efficient cars less per gallon.
Louis Kabbani, UK
There is no justification for the current high taxation on fuel other than environmental concerns. However, the Government of this country seems to think that this gives them "carte-blanche" to keep raising prices without investing any of this money in public transport or alternative fuel initiatives. The Prime Minister's veiled threat to reduce education and health spending if we, the public, insist on reduced fuel taxation is contemptible.
The price of fuel will never come down because the Government will continue to taut price increases as "Actions to save the Environment", whilst the Inland Revenue takes its 614% tax windfall.
Claudio G, Cantadore, Italy
The obscene level of taxation on motor fuel in this country is a disgrace. Anyone, like myself, who does not live in an urban environment, has no choice but to run a car. I live in Essex, but am 12 miles from the nearest railway station. There is no connecting public transport. It represents an unfair tax on going to work, on going to school - a tax on travel for any reason.
For Blair to suggest that the education or health services will suffer if fuel tax is reduced, is blatantly nonsense.
It doesn't matter how much or how little oil costs, this cost is only a very small fraction of what we pay at the pumps.
If the high price of petrol over the last few decades has not yet prompted extensive research and investment in alternative fuels, it is difficult to see what will.
Given this lack of commitment on alternative fuels on the part of the Government, one cannot help wondering just how much of a problem global warming really is, if it indeed exists as anything more than an excuse for extorting high taxes from us.
Carl Wheeler, England
Petrol and the vehicles that use it have been used as a scapegoat for the Government's inaction and stupidity for too long. There is no evidence that such things as global warming are occurring and it is about time the Government admitted this and dropped the duty on petrol.
The argument that schools and hospitals will suffer is total rubbish. If the idea is to stop people using petrol then where will the money come?
Oil prices are far too high at the moment. I, like many other motorists, would love to be able to use an integrated, fast, efficient and clean public transport system. However, until the Government installs an extensive public transport system which can provide a viable and practical alternative to using the motor car, they are simply placing an unbearable financial burden on many individuals who have no alternative but to use a car.
04 Jul 00 | Business
Opec disarray over Saudi oil boost
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