A week of contradictions

It has been a week of contradictions. For example, there is great confusion over whether record oil prices are good or bad for the environment. On the one hand there appears to be evidence emerging that the era of cheap air fares may be over and that people are switching to more efficient cars and public transport. On the other hand it seems that high oil prices could be an ecological disaster as more carbon intensive resources, such as the Canadian tar sands, become economically viable.

To emphasise the contradictions, it worth having a look at what has been a very long week for the Labour Party. The increases in Fuel Duty and Vehicle Excise Duty announced in the budget have come under severe pressure, most notably through the HGV fuel protest in London. There is the possibility of a Government U-turn on both these measures. In addition the UK Government has been attempting to persuade OPEC to increase oil supply and challenging industry to squeeze more oil out of the North Sea. Naturally, it has been questioned how these potential policy decisions fit with the Government's commitment to reducing carbon dioxide emissions.

On the flip side there has been a call, led, perhaps unsurprisingly, by George Monbiot, for OPEC to ignore the call for increased supply. In other quarters it has been questioned whether the proposed 2 pence Fuel Duty increase goes far enough. In fact there have been several calls for the reinstatement of the Fuel Duty Escalator, brought in by Chancellor Norman Lamont in 1993, which committed the Treasury to increasing petrol duties by inflation plus 3 per cent every year.

It is no surprise that these contradictions are confusing consumers. For example, in a letter to the Guardian newspaper, one person, having bought an hybrid car on the basis of Fuel Duty and Vehicle Excise Duty messages, questioned whether they would be due compensation by the Government for this unnecessary purchase. They'll probably be even unhappier when they learn that hybrid may have higher lifetime costs than conventional vehicles.