This year has seen the price of Brent crude oil fall from about $115 a barrel in June to about $85 today. This has resulted in some reduction in the price we pay at the pumps and is welcome, despite the very high tax content which dominates the final cost. UK taxes on a litre equate to around 58 per cent of the total price (2013 data). In Italy, the figure is around 55 per cent, in Germany over 50 per cent. In the US taxes account for only 14 per cent. CityAM
There are other energy sources which have seen even larger reductions but which have not had an appreciable impact on European consumer prices. The world price of coal has dropped 40% over the past five years, but due to the enforced phasing out of coal fired power stations in Europe by EU ‘decarbonisation’ targets, Europe has not been able to take advantage of this bounty. There has been a second impact on EU energy costs where the huge subsidies given to wind and solar power to make them appear cost effective against conventional power sources, have soaked up large quantities of consumer cash. Business too, has been hit, where leading economies such as Germany pay twice as much for their energy as their US counterparts. The renewables’ subsidies represents a huge opportunity loss, where the money for them could have been used for a better purpose.
In the USA, shale gas has halved the price to domestic consumers in some regions, and the boom in oil production has made the USA a net exporter. Whereas, in Europe, France has decided not to go ahead with shale gas drilling, and the UK has put every barrier possible in the way of using this valuable resource from right under our feet.
Ed Miliband’s plan to freeze the price of energy from 2015 came just before world energy prices began to fall quickly. As a consequence, energy companies have been reluctant to drop their prices in case the price freeze plan actually materialises.
It seems that the despoilment of our pristine countryside with renewables has been to no good effect, yet the government, Ed Davey, and DECC, are oblivious to the impact on the rural landscape. Worst of all, the extra costs hit those on lower incomes the most, yet the Labour party which claims to look out for the interests of the poor, studiously avoids any criticism of the impacts of its Climate Change Act 2008, with Ed Miliband as the Secretary of State responsible.
Successive governments have invested and committed hundreds of billions of tax money in the move to renewables, and they will strive to support that move by hampering fossil fuels as far as possible. The people who suffer from this are the consumers who will continue to pay very high prices for their energy. Nationally the economy will be put at a disadvantage against the world outside of the EU. The answer to this is to repeal the Climate Change Act 2008, and back away from the extreme damage looming up as a result of this very misguided EU sponsored edict.