- "Peak oil" scenario under assessment by Whitehall today

City News Desk

Booming demand in China, India and Middle East for crude oil, is likely to  push the price of crude above $80 a barrel, with a "stakeholder meeting" in Whitehall organised today to discuss the potential of a global shortage of oil.  

Lord Hunt the Energy Minister, in a report by The Guardian, is meeting key "stakeholders" today to calm fears that oil reserves in the UK are low, which could result in a "sudden shortage of supplies of oil".  Analysts fear that there could be an "early onset of peak oil", which is the stage where oil supplies start a "terminal decline" in global oil production.

The Government, is believed to have a renewed sense of "urgency" to deal with a potential "peak oil" scenario", with risk assessments to be undertaken to see the impact on the economy.

Last year a member Dr Fatih Birol the chief economist International Energy Agency International Energy Agency said:

"One day we will run out of oil, it is not today or tomorrow, but one day we will run out of oil and we have to leave oil before oil leaves us, and we have to prepare ourselves for that day," Dr Birol said. "The earlier we start, the better, because all of our economic and social system is based on oil, so to change from that will take a lot of time and a lot of money and we should take this issue very seriously," he said.

Another leading figure in the debate over oil supplies is Ian Marchant the Chief Executive of Scottish Energy who said:

“The West has been far too profligate in its use of oil and the price is going to say: stop it now and start using your oil as a scarce commodity,” Mr Marchant said. The energy boss is a member of the British Industry Taskforce on Peak Oil and Energy Security, along with billionaire Richard Branson. They believe that it will be very difficult for the world to produce more than 100m barrels per day of oil.

In the capital we have already seen petrol prices rise to 1.1609 pound per litre from 1.1210 in mid-February. Diesel rose to 1.1687 pound a litre, up from 1.1384 a month ago.

"Soaring wholesale prices, an increase in duty on 1 April and the end of the subsidy for biofuel producers could push the cost of petrol close to 124 pence a litre just after Easter," the AA said last week.