End of cheap petrol (for the time being)?


So, the price of petrol is going up. Do I hear petroleum companies claiming their uber fat profit margins are shrinking too far too fast? Or is there an actual reason for the three cent rise?

Petroleum is one thing people seem unable to do with out. We need it for many things. We need it for vehicles of all types, for planes, for smaller things such as lawn mowers, motor bikes. Without it essential services would quickly grind to a halt. Dirty linen from hospitals, would not be collected. Police might have to ration the time spent on active patrol. Supermarkets would run out of produce or at least face acute shortages and have to introduce buying limitations.

Where would the western world be if the nations of O.P.E.C. suddenly decided on a 50% price hike? It would be like an earthquake hitting the markets. And it has happened before, when in retaliation for being soundly thrashed by Israel and the U.S. in the Yom Kippur War of 1973, the Arab exporting nations, notably Saudi Arabia, Iraq, Iran, Kuwait, abruptly hiked the price of petrol. Would they do it again? Maybe. Perhaps if a military campaign against Boko Haram becomes necessary, or the I.S.I.S. war turns into something bigger, there might an accelerated rise in fuel prices again.

The power of the petro-dollar is substantially reduced though as Venezuela is finding out to the dismay of the government of Nicolas Maduro. Heavily reliant on petroleum exports, the collapse of the price has exacerbated a host of major problems in the centralized economy, where food is just one of many items in short supply. Not willing to overhaul the economy lest he appear to a weak successor to Hugo Chavez, and possibly about to lose a key ally after Cuba’s historic thawing of Cold War era diplomatic relations with the United States, Nicolas Maduro must be thankful that his term in office has significant time still to run.

Also suffering the petro-dollar blues are regimes in the Middle East, which were made rich by the petroleum industry. For them it is perhaps even worse, as little has been done to cultivate other industries such as tourism, retail, agriculture or research. The endemic corruption linked to the petroleum industry deals with politicians has amongst other things caused substantial human rights and environmental abuses. But as long as the West and China need their petrol and are prepared to turn a blind eye to the disgusting socio-economic state of these nations, the abuses will continue.

Few here in New Zealand, as long as the petrol price is down, seem to care about the alternative energy sources that we could (SHOULD!)be developing. They just want to know that they can jump in their cars and go clog the motorways. Riding a bus, cycling or walking are Green party ideas, or so the (non)thinking goes. The price will most likely go back up, possibly driven by one of the aforementioned conflicts getting out of hand, and people will start grumbling again, but the likelihood that any party in Parliament will be brave enough to stand up and try to force through meaningful changes is not very high.

And so it continues. When will we learn?

 

 

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