A government document meant to underpin future UK transport policy is based on an oil price of $50 a barrel - about half the current level, raising serious questions about the logic of resulting spending commitments.

The report, Road Traffic Forecasts for England 2007, was drawn up by economists at the Department for Transport to model trends in road traffic up to 2025. Published just two months ago, it is being used to shape UK policy on roadbuilding spending, traffic congestion and carbon emission over the next two decades. But the soaring price of oil casts doubt over the report’s estimates for growth in traffic.

“The central assumption for oil prices is that they will be around $50 per barrel (2004 prices) by 2025,” the report says, going on to assume a drop in the cost of car ownership by 2025. “Due to fuel economy improvements . . . the overall impact on the cost of driving is a 23 per cent fall for the average car,” the report adds. “Falling fuel costs per kilometre account for around 15 per cent of forecast traffic growth.”

However, with oil prices at a record after breaching $100 a barrel yesterday, experts and MPs claimed that the estimates were fundamentally flawed and made a mockery of the economics of future public spending on transport.

Andrew Horstead, of Utilyx, the energy consultancy, said: “A price of $50 or below is out of reach at the moment. They need to reexamine their core assumption.” He said that long-dated ten-year forward prices for crude are $86 a barrel, up 72 per cent on the report’s long-term $50 estimate.

The DfT document was published in October when global crude prices were around $90 a barrel.

Norman Baker, the Liberal Democrat shadow transport secretary, said: “The price of oil is only going one way over the next ten years and that is up.”

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