Fuel subsidies bad for the economy

REGARDING your leader ‘Soaring price of oil — The real cost of energy dependence’ (May 31), media pundits and politicians have been giving a variety of political explanations, reluctant to accept that the underlying cause is simply that of supply being unable to meet demand, nor do they understand the technical difficulties of increasing oil production.

Meanwhile, OPEC, the oil companies, governments and Joe Public play the blame game.

Worldwide, the response of governments to protesting truckers, fishermen and motorists, egged on by the media, is to absorb the price increase with subsidies and tax reductions. However, all are equally affected and can just pass the cost on to the customer. Too many trawlers, not enough fish, and too many truckers chasing too few customers are the real factors depressing earnings.

The AA wants tax rebates, claiming higher fuel costs discriminate against the poor; but the poor do not own cars; in Ireland, two million people, which includes the poor, do not own or drive cars — why should they subsidise motorists? We should not let publicity for a few selfish truckers and trawlermen trying to blackmail governments by blocking roads and ports, the false claims of the road lobby to speak on behalf of motorists and threats by other groups blind us to the fact the majority of people accept it is users who should pay for higher oil costs.

There will be less oil available in the future and its price will continue to increase. The least that can be done is to allow the natural economic process of higher prices to reduce demand by generating better efficiency in commercial transport and discouraging motorists from making unnecessary journeys.

Michael Job

Rossnagrena

Glengarriff

Co Cork