Oil Crunch will affect retail prices, warns Sir Richard Branson
Published: 12 February, 2010
An impending ‘oil crunch’ threatens the retail sector with rising costs of production and higher prices for consumers, according to an industry taskforce.
The taskforce warned that production of crude oil will peak by 2015, at which point supply will no longer be able to meet a rising demand. Sir Richard Branson, whose company Virgin Group is part of the coalition, said the resulting oil shortages and price volatility will affect UK industries across the board.
“It has a very, very wide impact,” warned Branson, “not just on transport businesses but on manufacturing costs; on production and distribution costs. An oil crunch would leave the UK vulnerable to rising prices in the future.”
“Manufacturing and retail depends on a just-in-time approach,” added John Miles, group board director at Arup. “Rising petrol prices and the cost of transport will go on to affect shoppers’ bills.”
The UK Industry Taskforce on Peak Oil and Energy Security, formed of six companies, hopes to encourage the new government to reduce the UK’s dependence on oil. They claim that ‘peak oil’ will occur in just five years, with as severe an impact as that of the credit crunch, if the government fails to switch to other renewable sources such as wind and nuclear energy.
