Is Your Journey Really Necessary?

As fuel prices soar, a survey has found that only 28% of UK drivers using cars on business say that all of their journeys are absolutely necessary - while 4% say that they simply did not need to make any business journeys by car, but did it anyway.

Calling Saves Miles

The survey by small business specialist telecoms provider Unicom asked car drivers from 98 companies to state what proportion of their day-time car journeys on business were absolutely necessary. “We wanted to find out whether they could have achieved the same result by making a phone call or arranging a conference call,” said Tony Eagleton of Unicom.

“28% said all of their journeys were necessary; 17% said that only 80% of their journeys were necessary; 19% said that 60% were necessary; 23% said that 40% were necessary, while just 9% said 20% were necessary and 4% said absolutely none of their car journeys for business was necessary.

Significant Savings

“Overall, therefore, it works out that a staggering 36% of business journeys by car could be replaced by a telephone call or conference call,” said Eagleton. “The responses indicate that as oil prices hit another record high there is a significant potential saving to be made by businesses.”

The question is at what price point will business adjust the way it works. Many years of low prices have lulled most of us into thinking that high prices are only temporary and do not reflect the start of a fundamental shift.

Reshaping American Lives

Although paying much lower prices, a front page report by USA Today (9th May 2008) says that Petrol costs are already reshaping daily life in the USA. The Gallup poll taken by 1,017 adults on 2-4th May says that 84% have started consolidating errands or taken other steps to cut back on daily driving. Concern is rising as 71% say that rising prices have caused financial hardship for them or their household.

Rather than a temporary fluctuation, 78% of Americans now see the price rise as a permanent change in prices, with just 19% still thinking they are temporary. In August 2003, 65% thought ‘high’ prices were temporary falling to 36% in 2005.

Pump Prices

However if Americans think prices are high, they are clearly living in another world to the rest of us. While happily consuming a third of world oil production, they rank 111 among countries in the price of petrol at the pump. An article in Le Monde (10 May 2008) sourcing ARINC puts Bosnia Herzegovina at the top of the list paying $10.86 per gallon at the end of March. The UK is 4th paying $8.38, with France paying $8.07. The paper says petrol is $3.45 per gallon, although USA Today reports prices have risen to $3.65, up from $3.034 a year ago. The cheapest places to buy petrol you probably guessed are in oil exporting countries: In Veneuela it is only $0.12 and Iran which recently introduced petrol rationing $0.40.

The issue is the price that an economy bases its price assumptions on. Any change from that level affects the whole economic system. With still so much denial of Peak Oil, it seems inevitable that price rises will create sudden economic shocks to countries around the world.