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Last Updated: Wednesday, 10 August 2005, 11:56 GMT 12:56 UK
I don't drive; why should I care about oil prices?
By Megan Lane
BBC News Magazine

With crude oil prices at a 22-year high, motorists are paying out up to 1 a litre at the pumps. Will this hike hit those who don't own a car - or drive for a living?

With crude oil prices topping $64 a barrel - up from $10 in 1999 - the sobriquet "black gold" has rarely seemed so apt.

The impact on the drivers of the UK's 28 million cars is clear; less immediately obvious is how the rising cost of crude oil has ramifications for all.

"If you take buses, trains or planes, you will be paying more for your fare. And our shops are filled with plastics, which are oil-based products," says Roy Holloway, the director of the Petrol Retailers' Association. "When producing - and delivering - these household goods gets more expensive, consumers will bear the brunt."

So demand for oil is on the increase, and not simply because of the world's unwaning love affair with motor cars:

HOME ENERGY

Gas and electricity prices, which are connected to oil prices, are set to go up this month. And with many Britons cooking - and washing and heating - with gas, bills will rise.

Taking a shower
Expensive business, getting clean
With wholesale gas prices increasing, supply companies such as Powergen and British Gas are among those forecasting bigger bills for consumers. Powergen is putting up its gas prices by 11.9% and electricity by 7.2%; British Gas has warned of a 15% rise in the year ahead.

The gas rise, Powergen says, is linked to the price of crude because gas is a by-product of drilling for oil. And electricity is generated by power stations fuelled by gas, among other energy sources.

The ever-increasing cost of these fuels has kick-started the debate about the need for alternative energy sources - and led some to look anew at the nuclear option.

TRAVEL AND HOLIDAYS

The cost of rising fuel bills are already being passed on to air passengers in the form of fuel surcharges.

Plane over motorway
Fuel hikes lead to fare rises
In June, British Airways increased its surcharge for the second time this year. The addition on each long-haul return ticket went to 48 from 32, and to 16 - up from 10 - on short-haul flights. No-frills carrier EasyJet has said that even though its passenger numbers are up, fuel costs have hit its profits. Its rival Ryanair has raised fares by 3% as its fuel bill has doubled.

But trains, buses and coaches also run on oil. And electrified public transport systems such as London's Tube network can't escape increased energy costs, as electricity is becoming more expensive to produce.

Rail and bus fares are on the increase, in part because of fuel costs. In June, First Great Western blamed its second ticket hike this year on rising oil prices. A spokesman said that as the company ran high-speed long distance trains, rather than local services, "we are more greatly affected than other operators by increases in fuel prices".

SHOPPING AND DIY

Oil and gas can be converted to petrochemicals, of which plastics are but one product.

Baby
Crude oil makes plastic for nappies
And the average shopping basket is packed with plastic. As well as packaging, plastic is a key component in thousands of household items.

It takes one cup of crude oil to make the plastic for one disposable nappy. Other products made from petrochemicals include ball-point pens and sunglasses, crayons and toothbrushes, deodorant and nail polish, tennis shoes and lipstick.

The products we use to build and decorate our homes are also based on oil, among them paints, carpets and many fabrics, such as canvas - a favourite for garden furniture and the summer's most fashionable trainers.

Carrier bag made from maize
Bags made from maize - and other starches - are creeping into shops
"Then there are the plastic carrier bags that shops give away with gay abandon," says Mr Holloway. "If these get more expensive because of the cost of oil, that will be passed on to shoppers."

Green campaigners say that although it is all but impossible to avoid plastics, shoppers can choose products with less packaging or those made from natural materials.

And instead of accepting bags provided by shops - some of which have begun to add a charge - reuse carrier bags or bring a cloth or plastic "bag for life".

HEALTH

Just as supermarkets, DIY chains and department stores are packed with oil-based products, so too are our medicine cabinets and hospital supplies.

Hearing aids, bandages, artificial limbs and heart valves, contact lenses and hundreds of medications are derived from petroleum.

ECONOMY

The price of oil has driven up the cost of raw materials, the fastest rise in 20 years, hitting profits and prompting warnings about investment and employment in manufacturing. And there are fears that rising oil prices will fuel inflation and damage the world economy.

Cars in China
China's love affair with the car
While the Bank of England last week shaved 0.25% off interest rates, the Federal Reserve has put up US rates to 3.5%, the 10th rise in succession.

And the booming economies of China and India are matched by their increasing demand for oil.

Few analysts expect prices to cycle back to previous low levels, as it is a finite resource - once supplies have dried up, that's it, no more.

"We now live in a high oil price society," says Mr Holloway. "As long as there is demand for it, with buyers prepared to pay anything to ensure its supply, I fear the direction for prices is north, not south."


Add your comments on this story, using the form below.

I already make efforts to minimise my use of oil, cycling wherever possible and avoiding plastics wherever natural alternatives are available. It is a shame that those of us who try to be responsible will have to help pay for others' excess. Perhaps giving us each a "carbon ration" would be a good idea?
Daniel Auger, Chelmsford, UK

Good, in fact oil prices should be doubled again, it's about time people started appreciating luxuries like travel, cars, plastic etc and understand their true cost ... and don't tell me we can't afford it, this country's loaded.
Nick, London

You'd think the government would reduce the fuel tax now. The extra money I spend on fuel is money that would otherwise be going towards savings/buying my own house - both things the government is trying to encourage!
Alan, London

All supermarkets should do more to promote the use of plastic "bags for life" as well as encouraging customers to reuse bags. I am the only person I know who follows this practice.The vast majority of shoppers I see in supermarkets take new plastic bags at the checkout. Supermarkets should draw attention to this wasteful practice by displaying notices at checkouts.
David Richards, Surbiton, England

Reducing packaging would help. Why are a lot of goods bought in supermarkets double-packed?
Tony Collier, Stafford,UK

Our planet is mostly water, surely that is the key to generating energy? Lets get our thinking caps on quickly!
Carl Hughes, London

I recently spent a year in Ireland, where there is a levy of EUR 0.05 on plastic bags. Because they cost money, plastic bags are not handed out "willy-nilly" as described in the article -- at a supermarket you have to request them (and you use them sparingly), and other kinds of shops, such as clothing shops, use paper bags. Most people in Ireland take their own bags with them to the shops, and I soon learned to always carry one in my purse in case I had to pick up bread and milk on the way home! This is an excellent system that results in reduced wastage. Perhaps the UK should look into introducing a similar system.
Laurie, London

I visited the small fishing village of Lochinver (West coast of Sutherland) two weeks ago and diesel was 103p/litre then. Please remind your readers that it is the poorest, rural areas which have to pay the highest fuel costs!
Andrew Kaspis, Brora, Sutherland, Scotland

It looks to me this could be the thin end of the wedge - our swine-like demand for energy and consumption is pushing our planet far beyond its natural resources. I feel sure we will see rolling black-outs and severe shortages or both food and goods if we are unable to change our ways.
Kevin Hall, Newcastle, UK

I am surprised that this analysis makes no mention of the very serious threat posed by climate change. If we are serious about tackling this threat, and ensuring the future wellbeing of the planet for generations to come, we need to reduce our reliance on oil in all its forms. In particular, we need to reduce our use of cars and flights (especially short-haul flights) and look at using alternatives wherever possible. Might the increased oil price actually have some benefit in reducing consumption and thus reducing climate change emissions?
Emma Dixon, London

Isn't it time the Chancellor reduced the tax on fuel? He must be coining it in.
Sue White, Prestwood, England

The most direct cost to individuals is still paying for petrol for private cars. Perhaps this will force more people to consider public transport, cycling and walking. And if plastics increase in price people can easily save the money again by recycling, reusing carriers, cutting down on packaging, etc. People need to think about this, and high petrol prices can only be a good thing for the planet, as it helps to bring people's selfish motives in line with environmental concerns.
Tim, Manchester

Garbage! An increase in the price of oil is a poor excuse for transport companies to hike up their fares, their fares are not based on covering their costs, they are based on making a massive profit. When oil prices DECREASE why don't fares do the same?
Gordon, Aberdeen

I know its controversial, but is this not a good time to reintroduce nuclear energy more seriously? The risks are there, but the cost to the planet and our wallets has got to be smaller in the long run. Rob
Rob, Macclesfield, UK

As the price creeps on fuel I am seriously considering LPG . But is LPG dependant on oil prices ?
Kieran O'Malley, Fareham Hants

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VOTE RESULTS
Are you planning to cut your use of oil, petrol or plastics?
Definitely - even if just to save cash
 51.38% 
Probably not - what's the point
 24.37% 
No way - life's hard enough as it is
 24.25% 
11270 Votes Cast
Results are indicative and may not reflect public opinion
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