This Is Guernsey

By Joel de Woolfson

LIVING costs in Guernsey could be set to soar during the next two years as experts predict crude oil prices could reach $200 a barrel.

Oil hit $100 for the first time earlier this year and currently stands at a record $122. Analyst Arjun Murti, who correctly predicted three years ago that prices would reach more than $100 a barrel, claimed there is a strong possibility of the cost reaching double that in the next 24 months.

Locally, it would put enormous pressure on services as the island relies heavily on imports. Steve Champion-Smith, director of Huelin-Renouf, said that many products would cost more.  ‘We are already very concerned without taking into consideration future predictions,’ he said.

‘It’s not just going to impact on Huelin-Renouf, it will have an impact on Guernsey because the island relies on imports and the cost of those is going to increase.

‘We are all going to be paying more.’

Mr Champion-Smith said the company was keeping a close eye on the progress of bio-fuel as an alternative.

‘I think there has already been some very positive feedback in terms of road-transport use,’ he said.

‘Hopefully, the day will come when a more sustainable fuel can be used for ships.’

He said Huelin-Renouf puts a surcharge on fuel used in its ships on the crossings between Portsmouth and Guernsey, but not on fuel used in its lorries.

‘As the price of oil increases, we have to review it and if operational costs are impacted to a great extent, we would have to look at that policy,’ he said.

Dave Finn, director of Braye Road Garage, said the global increase in the cost of fuel would have to be passed on to the customer.

‘I think that as long as there are cars on the road, people will  buy fuel,’ he said.

‘The garages won’t make any more profit on it.

‘We are making the same profit that we made two years ago but the price of fuel has doubled,’ he said, referring to duty increases and not solely oil costs.

‘If these predictions are correct, it’s going to hit the driver harder but they will always have to find money for fuel.’

Mr Finn added that even though prices had risen sharply in Guernsey, the amount of fuel sold had stayed the same.

Total Channel Islands general manager Stephen Rhodes said the company would always try to find ways of keeping prices down.

‘As consumers are generally aware, the international oil price is affected by a number of external factors,’ he said.

‘Notwithstanding, Total always seeks ways to keep its prices as competitive as possible.

‘Total launched its Simple Pay scheme, which helps consumers spread the cost of heating oil with twelve payments over the year.

‘Schemes such as that help customers manage their payments should there be any increase in crude oil prices.’