Oil is priced in US dollars the US dollar is weak against the Pound Sterling yet the price of petrol rises? It would seem we are being ripped off yet again. I also heat my house with oil as quoted elsewhere the cost of this has gone sky high and shows no sign of coming down being on limited income this is a major problem more so than the price of petrol.

A Seymour, Peterborough, England

Farrukh what are you on about? Iraq is pumping the same amount of oil today as it did before the war, and we are paying them the going rate.

John, London,

While there is plenty of oil in the ground, somebody else owns the ground the oil is under. It is called rent. Similar to why it costs more to rent a house in Los Angeles than it does in Houston. It gets worse. The cost of natural gas has been kept low by a short-term excess. North American natural gas production is irreversible decline. Canadian natural gas supplies are being increasingly used to extract "heavy crude."
Oil at $100/barrel is equivalent to natural gas at $15/mmBtu. That means either oil drops to $50/barrel or natural gas price doubles. Just a wild guess, but probably oil goes to $80/barrel and natural gas goes to $12/mmBtu. Still bad enough because $12/mmBtu gas means fuel for a CCGT power plant will cost 10 cents/kWh. The surplus of CCGT generation means 3 cents/kWh to keep them out of the junk pile. Maintenance on idle CCGT generation can be very expensive. Result is 13 cents/kWh marginal power cost.
Three decades of bad policy is getting expensive.

William Ernest Schenewerk, Ph.D., Los Angeles, CA

Here, in the US, the number or petroleum companies has shrunk from several dozen to a half dozen or so. And these companies seem to be closely connected. That explains their massive profits AND the higher prices for their products.

Joe Miller, Sr, Metropolis, Illinois, USA

This is only going to get worse as the oil runs out. How many price hikes will there be before it's gone and how many wars will be fought over these dwindling resources. We have already been held to randsom over gas supplies. We have to find acceptable, sustainable alternative sources of power, heating and transport now. How long could these oil and gas prices be charged if there were credible alternative sources? I admit that some of the alternatives aren't ideal but neither is the inability to control our own economy because of spiralling fuel costs.

A M, Southport,

In 2000, the price of oil dropped to almost $10 per barrel. Exxon was the only oil corporation in the top ten of the FT500 global corporations. Oil accounted for roughly 3% of FT500 profit.

In 7 years, we have had increased terrorism, a massive 'War on Terror' and the disruption of the greatest oil-producing region on the planet, with wars in Afghanistan, Iraq and Lebanon, Russian and Chinese intimations towards Iran, US, Russian and Chinese scramblings and reconfigurations in Central Asia and a reignition of confessional struggles in the region. Foreign policy the world over has become more security-oriented, military spending is rising everywhere and military exports suprassed their Cold War peak in 2005.

Meanwhile, in 2006 there were 4 oil corporations in the top 10 FT500 (now 3), with Exxon number 1. Now oil accounts for roughyl 12% of FT500 profit.

As Frederick says, the reality is down to speculation, but what is the cause of such speculation, and who benefits?

Des, Dublin,

One trade so far has been done at $100 for the minimum contract amount on NYMEX, costing one trader about $600 to be able to tell his grandkids that he was the first to trade in three figures, so not's let get too excited.

On the government tax take, expect the spin doctors to proudly boast that it's actually going down in percentage terms!!

Happy New Year ... anyone want to buy a 3.0 litre Alfa ...... ?

Paul, London,

All the easily recoverable oil deposits on the Earth have been discovered and exploited. Only volumes at great depths or in the tar sands remain.

Oil and gas prices will increase above inflation through this century.

Gas is the greater concern because for 20 million UK households, there is no feasible replacement for decades.

malleus sacerdotes, cheshire, england

This is strange.

There is no shortage of oil supply, there is no threat to maintaining this supply - so where is the problem?

Oil companies will see their profits leap as a result. No additional expenditure necessary - it's pure gain.

The "kiddy" dealers who bear no allegiance to anything but their bonus and take no responsibility for the effects of their speculation (gambling).

The government should immediately reduce their tax on oil based fuels and recover some or all of this by a windfall tax on the petrol companies.

Perhaps all governments then need to review the way in which oil is traded as a commodity and treat it, like water, as essential to life - at least until alternatives are more viable.

R Bingham, Lauzun, France

One of the things that is never mentioned in relation to oil prices is the fact that the oil companies still have "equity crude" i.e. crude oil which they own, as opposed to the stuff they have to buy on the "open"market. So, if they wanted to, they could sell the stuff at discounted prices, (just like they do at the retail pump), which would clearly have an impact on the "market"...... I wonder why they don't....
While it is obvious why they don't, it is still a factor which should be included in the argument surrounding "the price of oil".

Gerry Watts, Hobart, Tasmania, Australia

This is all down to speculation. The public is not so stupid as not to realise who is making the money on oil.

Frederick, London, UK

Surprising given the volume of oil being withdrawn from Iraq.

Farrukh, Woking, UK

As pensioners living in a rural area we depend on oil for heating and hot water. Just a few years ago, 1000 ltrs of oil cost about £140. I ordered the same amount yesterday and it came to £460 including the fuel tax. I note that the winter fuel payment remains the same!

Andy Williams, Cradley Heath, West Mids

There is NO reason why crude oil prices should have any effect whatever on the UK economy.
Since almost 70% of the price of petrol is tax, the government is in control of the major element of the cost of oil-based products, and must simply adjust its tax take to keep the price of petrol/deisel/heating oil affordable, thereby holding down inflation.
The government will still receive more than it has budgeted from oil taxes.
It truly is THAT simple !

Trevor, Bury St Edmunds, Suffolk

and what was the interest rate when oil was last at record highs in the 70s? The recent cut was a mistake and again, just like the previous cut in 2005, the MPC gave in to pressure from the media, economists and probably, the Treasury. The MPC should look to the ECB who are holding firm on rates because of inflation which is also the main target in the UK.

cww, suffolk,

The Govt should not just delay the 2p increase planned for April but progressively reduce taxation to keep the price below £1 litre..

I would have some support for the Govt if - as they previously promised - that the additional tax would be redirected into funding new alternative energy/fuel technologies. It's not of course but just being used to make up for Govt incompetence elsewhere.

DickW, Aberdeen, Scotland