Beleaguered British Prime Minister Gordon Brown flew to Jeddah, Saudi Arabia today to try to sort out the current energy crisis and rising petrol prices.
There are a number of points to make here. First, Gordon Brown is in so much trouble that Beleaguered-British-Prime-Minister-Gordon-Brown is now as much one word now as England-Cricket-Team-Middle-Order-Batting-Collapse is. This move is largely interpreted and being seen to be doing something and it is all Jonny Foreigner’s fault (he also tries to blame the credit crunch entirely on the Americans conveniently forgetting the only bank to have a run on it was a British one, Northern Rock). What he conveniently omits to say is that the price that we pay at the pump has much more to do with Gordon Brown than Saudi Arabia.
In the UK we now pay about £1.20/litre for unleaded petrol ($8.97/US Gallon). Of that £1.20 the petrol itself is only about 40p. Over 50p is duty and then 17.5% of the total price (21p) is VAT. A lot of the delivery costs are, guess what? – fuel costs. So of that £1.20 some 60% (71p) goes to Gordon Brown and, due to VAT, this increases as the price of oil rises. The easiest way to ease fuel prices is for him to cut fuel duty. By the way, Gordon Brown can’t drive a car and one suspects he couldn’t even tell you what the pump price actually is.
Second, I find it hugely ironic that whilst trying to encourage the driving public to economise on fuel use, he flies to Jeddah to give a ten minute speech. It’s not just him, there is a plane load of journalists going as well, despite the fact that what he was going to say was widely leaked in advance and appeared widely in this morning’s newspapers. Many of the hacks are complaining that they are spending longer in the air than they are on the ground in Saudi.
Third, as well attempting to persuade the Saudis to pump more of the stuff out of the ground (futile so far and much difference will it make if they do – with a Nigerian oil pipe line just blown up, the price of oil is bound to rise tomorrow) he is also trying to get them to invest their oil revenues in alternative forms of energy in the UK. We’ve recently been begging the French and Germans to build nuclear power stations for us (as we have lost the capability to do it ourselves) and now we are pleading for the Saudis to pay for it all.
But hang on a minute. Let me think, using oil revenues to invest in alternative sources of energy in the future? Isn’t Britain an oil producer? We still produce more than OPEC members Nigeria, Indonesia and Kuwait. Since 1968 the Government has raked in move than £230 billion in revenues from North Sea Oil and expected to make another £16 bn this year. Has this money been wisely invested for our future? Has it heck (before you get the idea that this is totally an anti-labour rant, Maggie Thatcher has been just as responsible for wasting Britain’s oil bonanza). Compare this to Norway, just on the other side of the North Sea – some of the oil fields even straddle the UK border. They have invested their revenue in a ‘pension’ fund, currently worth 1.939 trillion Norwegian Kroner (£190 bn / $380 bn) in addition to spending oil money on useful things on infrastructure improvements.
British governments of both colours have wasted our greatest natural resource and have blown it on short term political gain rather than investing it for our future. Britain is still blessed with natural resources, coal, wind, tides etc., and there are still 16-25 billion barrels of hydrocarbons left in the North Sea. We have got to start to invest our own oil revenues in future energy technologies, such as underground coal gasification, wave, tide, wind, even nuclear, and not leave it up to others and reap the long term rewards.
And don’t get me started on what a small fraction of a percent of British oil revenues have been invested back into British Geoscience – the subject that found them all the stuff in the first place.
Sources:
Daily Telegraph
The Times
The Guardian
Wikipedia
PetrolPrices.com
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