Friday, March 16, 2012

Temporary solutions

Seems that both Cameron and Obama have realised that high fuel prices might just be the straw that breaks the camels back, the camel being of course the opportunity to be voted in by the various mugs electorates they represent. So, what are they proposing?
HARD-pressed motorists were given a glimmer of hope yesterday after it emerged that David Cameron and President Barack Obama had discussed taking action to ease soaring fuel prices.
The two leaders talked about the possibility of releasing some of their countries’ reserve oil stock to increase availability and lower forecourt prices.
Speaking in New York, Mr Cameron said: “We are all facing the problem of higher oil prices and that translates into the cost of filling up the family car, which is very high here in the US, but frankly even higher in the UK.
“I want to try to help British families, just as Barack Obama wants to help American families.
“We didn’t reach a decision but we discussed the issue and I think it is important we do what we can to try to help families trying to make their family budgets add up.”
So instead of reducing the real cause of high fuel prices (taxation) they are going to attempt to glut the market with their reserves. That might work for the USA who only appear to have a taxation level of 20% on their fuel, but in the UK we pay something near 66% so for all a reduction might come it will not be as effective as far as I can see, though any reduction is of course to be welcomed.
The problem is though that these measures are only temporary, sooner or later the price of oil will rise again and we'll still have ludicrously high levels of taxation on the stuff.
The other thing that did occur to my paranoid way of thinking is that by opening up the vast U.S reserves, it rather looks like the USA (and the UK) are setting the stage for an attack on Iran, one of the first things the Iranians would try is to close the Straits of Hormuz to shipping thus cutting off the West's oil supplies, opening up the USA reserves would appear to be both a warning to the Iranians and a solution to the shooting war problem.
Either way, don't expect the price of fuel to come down by very much.

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