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Profit & Loss: High Oil Price Fuels Boost for Housing

Posted on: Tuesday, 6 September 2005, 15:00 CDT

THOSE of us out for a weekend jaunt to the further reaches of the nation will have encountered the GBP 1 litre of petrol.

And the message appears to be "grin and bear it". Fuel costs look like being a major component of household expenditure for some time yet.

Although prices show some signs of stabilising, the full impact from Hurricane Katrina - which last week propelled a barrel of oil to a record high of dollars 70.85 - has still to work its way through to the UK pump.

The Petrol Retailers' Association is warning of further increases of three to four pence a litre over the coming week.

As the cost of diesel and unleaded across the central belt spirals towards a pound a litre - a level already breached in parts of the Borders and the Highlands - oil companies are having to fork out millions of pounds upgrading equipment unable to cope with anything north of 99.9 pence.

Yet, amid all this woe for the motorist, there lies an indirect benefit to the housing market - currently suffering a massive shortfall between supply and demand.

PRA director Ray Hollaway points out that smaller suppliers will always suffer the biggest squeeze when prices head higher, and predicts that by the year end the number of UK forecourts will have tumbled from a 1970s peak of 39,000 to well below 10,000.

With the number of petrol retailers deciding to call it a day on the rise, an increasing number of brownfield sites are being freed up for building flats and houses on, easing some of those supply constraints. Like they say; every cloud . . .

Gloves off in IT

OH to be a fly on the wall. Microsoft and Google were today set to meet in a US courtroom amid an increasingly bitter legal dispute. At the weekend it was reported that Microsoft's chief executive Steve Ballmer had vowed to "kill Google" in a tirade against the firm.

The claim was made in a sworn statement by Mark Lucovsky, a Microsoft man who quit for the fast-growing search engine last year.

He also alleges that Mr Ballmer, who has denied the claims, hurled a chair across the room when he informed him he was leaving the software giant.

The punch-up between the two firms was triggered when a senior Microsoft manager was hired by Google to launch a research centre in China.

And who said IT was a placid profession?

Source: Evening News; Edinburgh (UK)

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