The price of Brent crude oil dropped $10 in just 48 hours at the end of the last working week. A massive fall. But why should these continuing falls concern us?
“Shoot up like a rocket, fall like a feather”
That was a phrase a government minister came out with a few weeks ago. It was to describe the way the general public felt about fuel prices and how companies seem very quick to raise fuel prices when oil goes up, then take an age for them to fall when oil falls. And whilst a half baked investigation into the oil industry hasn’t yet found anything incriminating or cartel-like, deep down we all know that we’re being played at the pumps for fools. Yet there is very little we can do. We need fuel, therefore we have to pay for it, its as simple as that.
But how long should we have to sit around and wait for those pitiful one or two pence decreases once a month? When oil was last this cheap ($70 per barrel), the average petrol price per litre was 103p, a full 17p cheaper than it is right now. Yes there has been a 2.5% VAT increase, but other external factors aren’t that different now to what they are then, so where is the fall?
The general public have to massively increase the pressure on Government and companies to start being fairer to the UK when it comes to fuel prices. It’s not just motorists that get hit in the pocket when it’s time to fill up. It affects everyone and everything we buy. When it costs more to transport things, the prices of those things go up, making us spend more. So that weekly shop we all do is directly affected when BP, Shell, Esso and the rest of them fail to pass on genuine savings to everyone else, all in the name of preserving their billions and billions in profit.
It directly affects the prices of our windows and doors. How many times have we letters from our suppliers blaming higher transport costs for having to increase prices? It continually eats into everyone’s margins and adds unnecessary pressure on business.
I’m not saying oil companies shouldn’t be making good profits, every business needs to in order to survive and invest in the company. We need the oil companies to make money to continuing pumping the stuff out of the ground and look for more until we find truly renewable energy resources to replace it. Until then, we should all be demanding that we pay a fair price for our fuel. We can all see it happening in front of our eyes. We live in an age where public protest and pressure seems to get some results – why not get firm?
We’re being taken for a ride, when did we all get soft about dealing with that? The frustrating thing is, prices look set to continue to fall for a while to come. OPEC decided not to cut production to try and force prices back up, which means oversupply will continue. US shale oil has taken off, again taking the focus away from OPEC countries. China, India and the EU are all slowing down, so demand for the black stuff is falling there too. So $70 is unlikely to be the bottom of this rut. But how long will it be before fuel companies decide to pass on those savings?
Oh and Mr Osbourne doesn’t get out of this lightly either. He COULD cut the VAT on fuel if he so wished. There have been plenty of studies and reports published out there which show rather convincingly that just a minor decrease in tax on fuel would add billions more in spending power to the general public, actually offsetting the tax reduction. But then again, Osbourne isn’t one for cutting taxes for the masses is he?