I’ve lost count of the number of times I’ve been asked about the price of oil in the past few months.
TV interviewers, mates, radio presenters and anxious readers: all are shellshocked by recent events that have conspired to make oil in 2008 more expensive than ever before.
And I have a two-word answer for anyone who predicts that fuel prices will return to ‘normal’ any time soon. They won’t.
The world has already reacted to record pump prices.
Americans are using a million fewer barrels a month than this time last year, Britons are cutting back on car usage and even Chinese demand has been stymied in recent months.
But the trouble with the current oil crisis is that there simply ain’t enough to go round – sliding demand or not.
Pump prices will fluctuate, but don’t think cheap fuel will return.
Global output is in decline in 60 of the 98 oil-producing nations. For every barrel we discover, the world consumes three.
It’s small surprise that analysts agree prices will stay high, Goldman Sachs predicting a barrel will hit 200 US dollars in the next few years.
Despite the rising value of oil, the cost of extracting new reserves is often uneconomic.
And why would Opec and other producers increase production – at vast expense – only to lower the value of their commodity?
So pump prices will stay high – and businesses and individuals must adapt fast to the new twilight of the Oil Age.
But as with any macro-economic change, this new era brings an opportunity.
Shape your business according to consumers’ mores – provide teetotal cars and trim your own bills by greening your enterprise – and you’ll be on to a winner.
It’s worked for other retailers selling FMCG, so why not yours?
Ignore what’s happening at your peril. Or else, they’ll have you over a barrel.