Running your business to make money: Oil dependence

2008-06-02 00:00

It is fairly easy, these days, to update yourself with everything going on in all the world’s major countries. However, I like to try and get to the UK at least once every two years to look firsthand at what is happening socially and economically in the country. I am writing this week’s column from the heart of rural Devon and what a glorious sight it is.

On the other hand, I have no doubt that the British government is far from blooming and about to implode. If ever a prime minister knew when to leave office, it was Tony Blair — talk about deserting a sinking ship!

The number one issue currently possessing the UK is an economic one — the price of oil and its impact on virtually every aspect of society and business. What amazes me is that stupid mistakes are being made and, even more worrying, those who are in power are doing nothing to prevent the unadulterated greed of the major oil producing countries and companies.

The Opec oil producing countries are rich beyond our wildest imagination. The world’s major oil companies announce, year after year, billions and billions of dollars profit. Governments extract huge excise duties (two thirds here in the UK) on every litre of petrol sold.

The price paid for this state of uncontrollable greed has been and continues to be enormous on the fabric of socio-economic performance. The explanation given for the continuing rise of oil prices is that of supply and demand. Yet, in virtually the same breath, the media reports that Iran is cutting back on production. Who is fooling whom?

Those in power must surely appreciate that if the prices of petrol and diesel continue to increase it will have massive impact on inflation and unemployment levels and the lives of many millions of people who simply cannot afford current fuel costs, let alone predicted future levels. Yet, in the face of all of this, the British government intends to increase duties on every litre of oil sold. This is madness.

Last weekend, here, hundreds of transport companies mobilised a major protest with a 10 mile-long convoy slowly driving along the principal route, bringing the province to a standstill.

I spoke with an independent haulage contractor who told me that a year ago it would have cost him about £500 to fill his lorry with diesel. Today, that figure is £1 000. The consequence for his business is closure, as he cannot recoup the additional costs from his customers.

There is still a worldwide tendency for the majority of people to believe their leaders possess great wisdom. I suggest that all too often, the opposite is true.

We in South Africa have a lot in common with the UK in terms of the oil question. Britain needs to get the freight off the roads and on to the rail system — this is certainly true for South Africa as well. Equally, government needs to give its people a truly world-class transport service. My point is governments are just delivering more of the same. We do not see them coming forth with long-term solutions.

In our country, the need for oil, petrol and diesel is enormous. We don’t have effective bus or train services, and are dependent on cars and taxis. Equally, our businesses are dependent on the articulated lorry, the gas-guzzler. We need to invest in a positive future we make happen as opposed to a passive acceptance of oil prices that simply get higher and higher!

frankgreenfield@iafrica.com

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