Hold on to that last drop of oil!

As you dedicate Wish you were here to oil, for once, I dont envy my parents for being the ones earning all the buck!

The month that is soon-to-be-gone now, has just given us a glimpse of what lies in store, an oil price-hike, so not supported by a decent pay-hike.Political constraints have prevented this from happening for some time now, but there always had to be some point of inflexion, forcing the Government take the dreaded decision. A doubling in oil prices would surely have many other inflationary effects: increasing the cost of heating oil and aviation fuel, plastics, chemicals, as well as raising the material costs of all firms (which would likely be passed onto consumers).

But, what is, or rather, are the major reasons behind oil becoming dearer ?
You are the reason. And me. And everybody who buys gas or petroleum products. Supply and demand, that's the name of the game. We demand tons of oil so up goes the price. Works like that in all markets and the markets rule. Always have. Always will. While the supply has remained static, or better put, shrunk there is an ever increasing demand largely from China and India.

However, there are other factors too that have contributed to this meteoric rise in oil prices.Rampant price speculation. People bid for oil in the future, expecting the price to go even higher as demand rises and production decreases. This becomes a self-fulfilling prophecy.The weak dollar. A weaker dollar buys less oil, so prices per barrel rise. Global uncertainties dont help the common man's cause either.

I see a silver lining though. As the Hindustan Times reported, in Australia, hundreds of kilometres of cycleways are being used more than ever before, in a bid to save money on higher fuel costs. In America, the planet's biggest gas guzzler people are already figuring out ways to cut down on fuel consumption. Energy saving products ranging from CFL light bulbs to hybrid cars have started to find there way to the top of the average buyer's list (God knows why Chidambaram doesnt like the new Hybrid Civic?!). Pink Floyd would be happy to see the Reva sing Coming back to life. Where the environmental-friendly 'sham' didnt work, spiralling oil prices surely has.Curbing demand rather than increasing supply seems to be the more logical and viable route to take.

Now, the big BUT, like with every theory you start finding workable. Will we, here in India do anything about it on our part? Are you prepared to shun you 8-cylinder guzzler for the puny Reva? Can our white-collared gentry even think of using a cycle? Will the urban finally take to the bus, or even the BRT for that matter? Will you take that not-so-long walk to the market to get your daily rations?
Or will we just wait like sitting ducks for the unsustainably high prices to significantly dampen demand and thus, lower the prices?

Ponder.

Ciao!