If any of you guys drive, you would know about this already, 85p per litre at the moment, thats crazy,,,
Jun 1 2004
EXCLUSIVE
By Bob Roberts And Gary Jones
TERRORISTS plotting to devastate the global economy by sabotaging vital oil supplies had the fuel-hungry West on red alert last night.
The concerns come amid warnings that another attack on Saudi Arabia, the world's major oil supplier, is imminent.
Petrol is set to rise 20 per cent to 92p a litre following the weekend slaughter of 22 people in al-Khobar if, as expected, oil prices rise from $40 to $50 a barrel.
Chancellor Gordon Brown was urged yesterday to scrap plans for a 2p rise in fuel duty, planned for September, to ease pressure on motorists and transport operators.
But experts believe prices could spiral out of control if terrorists interrupt oil supplies leading to fears of a world energy crisis, global slump, tumbling house prices and a collapse in consumer confidence.
Justin Urquhart Stewart, of Seven Investment Management, has "no doubt" that fuel prices could hit $100 a barrel, equal to about £8 a gallon of petrol. He said yesterday: "Terrorists have found the weak spot in the lifeline of Western capitalist states.
"Just a few more events in Saudi could cause very significant problems.
"It would take remarkably little to cause a destabilisation here in the UK, let alone on a global level. We're not just talking about the impact on oil prices, but investment and job creation. It's a nasty-looking recipe."
A surge in the price of oil will renew fears of a world energy crisis not seen since the dark days of the early 70s.
State oil giant Saudi Aramco has vowed to keep its crude supplies flowing smoothly in a bid to stop prices soaring out of control.
But that will not be enough to head off today's expected surge which will hammer drivers in the pocket. Head of economics at the accountancy firm Numerica Maurice Fitzpatrick said a 20 per cent rise in the price of a barrel of oil was "widely predicted".
Urging Mr Brown to scrap his planned 2p duty rise, he said: "The extra revenue will bring in an extra £5billion to the Treasury, so the Chancellor could actually cut fuel duty by an extra 8p."
CBI Chief Economic Adviser Ian McCafferty also called for the rise to be dumped. He said: "The outlook remains vulnerable to rising oil prices and potential financial market instability."
Liberal Democrat Norman Lamb, who is on the Commons Treasury Committee, said the Government must respond to the crisis. He said: "It would be entirely wrong for it to profiteer from this surge in prices.
"The Chancellor has to be ready to delay or drop the fuel duty increase. If prices are going up, it is wrong to impose it."
But the Treasury urged caution and said the signs emerging before an OPEC meeting of oil-producing countries on Thursday were "positive". A senior spokesman said: "All this speculation about fuel duty is just that - speculation. We are focused upon the price of oil.
"It's too high. That's why the Chancellor is working with oil-producers to boost production."
Mr Brown will hold crisis talks with Opec leaders before Thursday's crucial summit.
He will make clear that Britain believes the price of oil is already too high.
And he will urge Opec to increase production to ease pressure on petrol prices at the pump.
Crude oil prices have already risen by about 25 per cent this year, reaching levels not seen since the early 1980s. Higher than expected demand in China and India has added to the pressure, with speculators cashing in by hoarding supplies.
The al-Khobar massacre was the second major attack on the Saudi Arabian oil industry in less than a month.
Yesterday Britain's ambassador to Saudi predicted that another terrorist incident in the kingdom was "probable".
Declaring that the country was "facing a serious and chronic threat", Sherard Cowper-Coles said: "There is an active terrorist campaign here - and Westerners are the targets."
The Foreign Office in London has advised against all but essential travel to Saudi and urged visitors to take great care.
Its website warned: "We continue to believe that terrorists remain determined to carry out further attacks in Saudi Arabia, and that these may be in final stages of preparation.
"The threat includes, but is not limited to, residential compounds and diplomatic and other official premises."
Yesterday Prince Turki al-Faisal, Saudi ambassador to London, said everything possible was being done to defeat terrorists out to hold the Western world over a barrel.
Five of six cells known to be active in Saudi Arabia had been dismantled in the last year, he told the BBC.
But he added: "These things can take decades. It took you two decades to get over terrorism in Britain. These people are willing to kill themselves to achieve their purposes. It's practically impossible to prevent them totally from taking action."
also see
http://news.bbc.co.uk/1/hi/business/3766097.stm
