Fuel efficiency standard lead to lower global oil prices
A new study commissioned by the European Federation for Transport and the Environment has suggested that current thinking about the fuel consumption of vehicles has left out an important element. Specifically the impact of fuel efficiency standards on the price of oil. The report could change the way governments, politicians and the EU views the pricing of transport.
The report, published by the energy consultancy Enerdata, suggests that the European fuel efficiency standards for new vehicles (effective 2012) will lead to lower global oil prices. The report proposes that for every 1% reduction in global oil consumption, the price of oil actually drops by up to 2%.
How this differs from current thinking is that economic assessments of energy efficiency measures normally use fixed oil prices when accounting for economic benefits. By working out that the price of oil will fall when the EU’s mandatory fuel consumption legislation takes effect, it means the economic benefits of fuel efficiency measures have been underestimated, typically by up to 17%.
Managing Director of Commercial Fuel Solutions Ltd, Mr Robin Futcher commented, “whilst everyone welcomes any form of saving with regards to fuel expenses, both the government and the industry need to observe the need to remain as fuel efficient as possible,” he continued, “It is in everyone’s interest to operate more efficiently. Hopefully in the future governments will reward fuel efficiency rather than simply impose increased fuel taxes in an effort to reduce consumption. We need to see more incentives and less penalties, it is easy to respond negatively to changes of this nature but I think everyone would react differently if they could see something worthwhile in it for them.”
more information is available from Enerdata http://www.enerdata.fr/enerdatauk/








