When the Levee Breaks, a selfish look at the financial effects of Katrina and how many more fuel inc
The aftermath of Katrina has affected more that just New Orleans
and the surrounding gulf coast. There are huge financial
implications associated with the catastrophe, from the initial
humanitarian aid to the rebuilding and repairing needed to get
the local area back on its feet. Eight oil refineries shut down
as a result of Katrina could take many months to restart. The
Gulf Coast is a prime supplier of oil, through pipelines now
shut due to lack of power and ocean-going barges unable to load
from ports eradicated by the storm.
>From a global perspective, the loss of oil production in the
area is sending shockwaves through the world’s financial
institutions and economies. Even before hurricane Katrina’s
damage to oil production the price of fuel has increased to a
major degree. The following data compares price increases from
September 2004 to August 2005 in the United States of America
and the United Kingdom.
US Fuel Price Increases
September 2004
Unleaded: £0.28 ($0.48) per Litre
Diesel: £0.29 ($0.51) per
Litre
August 2005
Unleaded: £0.38 ($0.67) per
Litre
Diesel: £0.39 ($0.68) per Litre
UK Fuel Price Increases
September 2004
Unleaded: £0.87 ($1.59) per Litre
Diesel: £0.83 ($1.52) per
Litre
August 2005
Unleaded: £0.96 ($1.76) per
Litre
Diesel: £0.94 ($1.73) per Litre
In the United Kingdom, motorists are burdening more fuel
increases with the price of 1 litre soon to exceed £1 ($1.84).
About 65% of the price UK motorists pay goes to the government
in tax so the additional revenues generated are unlikely to
direct the government to rebalance tax levels on fuel unless the
wider economy comes under threat.
“…If it keeps on rainin’, levee’s goin’ to break
And the
water gonna come in, have no place to stay…”
When The Levee Breaks
Memphis Minnie
recording of
1929 written after the devastating Mississippi flood of 1927
My next visit to fill up my car is once again bound to force a
whimper from my wallet especially when the litre dial spins at
the same rate as the total cost dial. But as my day to day
problems range from the extra few pounds I have to pay on the
weekly fuel to what colour to paint my children’s bedrooms, I
consider myself very lucky and certainly very selfish… shame
on me!
