Two of the most powerful men in the fuel industry have given opposing views on what the future holds after oil values reached record highs this year.
Victor Khristenko, the energy minister for Russia, which controls 5% of the world’s oil reserves, said people would have to learn to live with expensive fuel. He said: ‘One can say with certainty that the era of cheap hydrocarbons is over.’
Meanwhile, BP’s chief executive Lord Browne said the price of oil is likely to fall but in the longer term. He believes oil extraction technology will improve and feels there are more reserves yet to be found.
‘We cannot really count on oil prices easing very much in the near future’, he told German weekly Der Spiegel.
He said that in the next five years prices could average $40 a barrel and, in the next decade, ‘it could even be $25 to $30’.
In April this year, prices reached a record $75.35 a barrel.
Mike Waters, head of market analysis at fleet management firm Arval, said the market would not change overnight. He said: ‘Understanding fuel spend is the foundation for concerted action to address costs.Once fleets have this information, they can develop policies to manage fuel buying, modify driver behaviour and thereby mitigate the impact of these global factors.’
Oil prices will be one of the issues addressed by G8 leaders in St Petersburg next month.