Some more Good News, but maybe with a sting in its tail.
Cheaper Fuel Likely – But at Environmental Cost
News entry dated 18th Jan 2017
With so much happening so fast in the world of politics, it’s sometimes difficult to look at everything in totality and assess what kind of impact events will have on the price of fuel in the UK.
That said, a few things are stacking up this week that suggest that cheaper fuel could be around the corner – so long as we remember that we’re making these predictions from a punditry perspective and that things change quickly these days.
The first big factor is that the Pound has finally recovered somewhat against the Dollar – now standing at $1.23 at the time of writing. This happened in the wake of Theresa May’s speech earlier in the week when she drew a line firmly in the sand and set out what we should expect from Brexit.
While it’s important to point out that Sterling has by no means recovered compared to where it was before the referendum, there has been a marked improvement. With oil traded in Dollars, we could expect to see a small reduction in UK costs, assuming Sterling remains where it is or strengthens further.
Oil pollution
Oil Prices and the “Trump Effect”
In isolation, we’d probably have been inclined to say that this small jump in the value of Sterling wouldn’t be enough to have much of an effect on pump prices. However, petrol prices are about far more than currency variations.
A huge factor is the price of oil on the global marketplace. This has remained fairly static recently since many oil producing nations agreed to freeze production from the start of the year. We’ve not seen as big price increases some predicted.
Heavily linked to this is the fact that on Friday, Donald Trump will become President of the United States. Trump has made no secret of his fondness for fossil fuels, so there’s a strong possibility he will quickly announce policies that will amount to a “fracking free for all” and a big increase in US shale oil production.
It’s possible that a mere indication of this policy will be enough to immediately raise speculation of a new oil glut and push prices downwards.
The Environment
The scenario laid out above is well within the realms of possibility, and if it marries up with stronger Sterling, genuinely could mean cheaper fuel in the UK. However, environmentalists will no doubt feel dismayed at the big picture, and the trade-offs that will be made. Cheaper fuel in the short term could have long-term effects that will be a cause of distress to many.
From Petrol.com
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