Friday, 8 August 2008

Over a barrel?

By Sheik Yermoni Maker

The current high price of oil is giving all of us some real grief at present – and it seems our Councils are feeling the pain, too.

North East Councils have seen their collective fuel bills rise by more than £3 million in the past year; Durham County Council (perhaps soon to be re-named – hopefully not!) tells us their increased bills will be just shy of £500,000.

So, what do our elected leaders propose to do about the problem? Seems like they’re keen to get together with other councils from all over the country and speculate on the oil market. That’s ‘speculate’ (dictionary definition: To engage in a course of reasoning often based on inconclusive evidence) with your money….and mine.

They would pool their resources and go out and deal on the oil futures market to get the best deals, gambling on oil prices either remaining high or going higher to make large savings.

So far so good…..but the oil market is notoriously volatile, and once you’ve forward-bought oil at a set price there’s no backing out. What happens if the price of oil drops? You’re stuffed, and locked-in to paying over the odds.

Now, forgive me for thinking the un-thinkable, but successful speculation in any commodity futures market demands agility, balls of steel, and the ability to make instant decisions. Are any of these words and phrases ones that you would associate with our councils? Thought not.

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