Scary stories from New England about the fuel crisis coming this winter.
There at least, they have some perception that the crisis is coming, and the market forces fairy is not going to wave a wand and make it all better. New England is well known for being especially dependent on oil for home heating, and naturally there is no immunity from price hikes. One retail heating oil dealer says she expects a typical household delivery that cost $500 last winter will climb to at least $850 this winter . At four deliveries on average that’s over £700 or 70% up on last year. The situation in Maine, where 80% heat with oil, is particularly dire: Maine Sen. Olympia Snowe, the panel’s ranking Republican member, said high oil prices are a matter of life and death. She said parts of Maine could literally "become uninhabitable" for many this winter
A fuel dealer noted how she has become a de facto social services agency It is very tough looking into the eyes of these customers when they ask me what I think they should do….. I don’t know what to tell them. For the first time I think some of my customers are going to have to choose between main essentials like groceries, gasoline, warm clothes and heating oil just to pay their bills
Can UK consumers cushion themselves? Well certainly they won’t be as desperate in their choices as those in the US, but the impact on their spending on anything else is going to be huge. The idea that the Bank of England wants to cure inflation via interest rates is laughable and dangerous when the main inflationary cause is energy. The Bank wouldn’t put up rates if taxes rose, why does it think that upping interest rates due to similarly non-discretionary spending as energy can do anything except push the UK economy over the edge?