The real cost of oil is, in fact, pretty cheap - compared to our own Irish bottled water, writes Kilian Doyle
AS I SIT down to write this, crude oil is down to nearly $42 a barrel - the cheapest for four years - and US bank Merrill Lynch is predicting it could fall to as low as $25 next year. 'Tis a far cry from the heady times a few months ago when the stuff was a whopping $140.
Things are looking good for a return to the halcyon days of fuel, costing well under a euro a litre.
It all depends on whether or not the fuel companies are feeling magnanimous. While they are never shy about matching rising crude costs, they are somewhat less on the ball when it comes to dropping them.
In their defence, the petrol you are buying today was most likely refined from crude oil bought months ago for far more than it costs now.
But, whatever you think about their policies, the reality is that we have little real choice but to pay their prices.
Sure, you could always sow your garden with oil seed rape, harvest it and press it to create your own biofuel. Be my guest.
Meanwhile, back in the real world, the rest of us are stuck with whingeing about the cost of oil-based fuels. But should we be whingeing at all? I think not. For, when you consider what goes into producing it, the reality is that petrol and diesel are dirt cheap.
Oil, being a natural resource, is actually free. Until you try to get to it, that is.
First, you have to pay specialised geologists to find it. Then you have to buy the land and bribe the local officials or fight a costly war to get the rights to drill for it.
Then you have to build oil rigs to get it to the surface and pipelines to bring it to the ports, where you have to transfer it into massive tankers and send it off across the oceans. And then pay a ransom to pirates to get it back.
Once you get it to your intended destination, you face wharfage fees. Then you have to pay truckers to bring it to refineries where you have to transform it into fuel before paying more truckers to bring it to filling stations.
These filling stations then have to pay for staff, rent, electricity et al (If you think you are being ripped-off by garages, think again. They make at best, 3 cent per litre, which hardly constitutes rampant profiteering, does it?).
The real rip-off in the chain is when the Government gets its hands on it. Our Great Leaders levy 52 cent a litre in excise duty on petrol, and 38 cent a litre on diesel.
This, I don't mind so much. No civic-minded, patriotic taxpayer could. After all, they have to raise the money from somewhere to pay for the dirty, under-resourced hospitals and overcrowded, rat-infested schools we all enjoy, don't they?
But here's the real scam: VAT at 21 per cent is not just charged on the base price of fuel but on the total price after the duty is added.
So the Government taxes its own tax. Sneaky, eh?
Even so, by the end of all this, you're still only paying the bargain price of a euro a litre.
Still unconvinced? Go into a filling station in Tipperary, or indeed any other county where still waters run deep.
Buy yourself a litre of fuel - which will have travelled halfway around the globe. Then go into the shop and try to buy a litre of locally-produced spring water - which will have travelled halfway across the county - for a euro. You'll be laughed out of the shop.
Futurists reckon some day we'll be able to run our cars on water.
My advice to anyone looking forward to this: be careful what you wish for. It could end up costing you a fortune.