The world can sometimes still seem like a big place, where few things are held in common. But the dismay at rising fuel prices is fast becoming universal: today motorists in China are coming to terms with an 18% increase in the price of petrol, thanks largely to the machinations of their government. They have our sympathy. We know what it's like.
All around the globe, the rising cost of oil is biting hard. Europe has been hit by protests. In America, drivers are dismayed at paying the equivalent of £2 a gallon, a level we reached long ago in Northern Ireland. As our reports show today, we may not be far off from paying that much per litre by the autumn.
Even as things stand today, Northern Ireland is feeling the pinch. The price of diesel has increased by two-thirds in the past five years, and the cost of petrol is up more than 50% in the same period. The start of this increase is largely down to increased taxation, much of it introduced by the current Prime Minister. Gordon Brown began increasing the price at the pump supposedly as a green measure, designed to cut emissions by forcing drivers to use their cars less. There is little evidence of success on this front. Perhaps the most obvious achievement of this measure will be to hasten Mr Brown's departure.
But the more dramatic rises have come in the past year, as the barrel price of crude oil has climbed and climbed. Diesel is up nearly 34p in the past 12 months, with petrol up more than 20p.
There are a number of reasons why this has happened so suddenly — such as increased consumption from the newly dismayed Chinese motorists and global instability. But the major driver appears to have been market speculators. Because oil is sold in dollars and the dollar is at a low, they are buying up oil reserves in the expectation of massive profits when the dollar begins to rise again.That decreases the available supply, and less supply means higher prices.
Expect things to get worse. The Chinese price increase could actually make oil prices rise in the rest of the world. That's because the Chinese government has ended a state subsidy on oil and associated price regulation. Oil producers now have a bigger profit motive in China, so they'll be trying to sell more there. Most of these factors — international market speculators and the awesome appetite for oil in other countries — are beyond the reach of the UK Government.
But not everything is. Taxation still accounts for more than half of what we pay at the pump, and it's scheduled to increase by another 2p a litre in the autumn. Because inflation is already hammering families — and the promise of rising interest rates will make things more difficult — Mr Brown needs to forget the next price hike and consider rolling it back.
And if he's serious about making the UK greener, he should revive and enhance renewable energy subsidies that were available in Northern Ireland until recently. Those systems — solar, windpower, and so on — will pay for themselves sooner if oil keeps burning up our money.