The increasing price of petrol remains a mystery to me. Why does it increase? What are the mechanisms involved? My general understanding is that a portion of the price is for local taxes and levies and the other is linked to the oil price. Thus fluctuations in the price and changes in the exchange rates would impact the cost. Easy enough, yet why do government's allow the price to fluctuate so? In some parts of the world even minor adjustments can cause significant social unrest and undermine the authority of the government. The West Bank is starting to feel the pinch at the moment and over the past two days protests and transport strikes have affected the territory widely leading Mahmoud Abbas to proudly announce at the Arab League Summit in Cairo on Wedensday that the Palestinian Spring had begun - a reference to the Arab Spring of 2011. Questions aside what is clear is that the following theorem can be used to determine unrest. Petrol price increase = Unrest increase + political instability. We should expect a few more countries in the region and in Asia, in particular, to begin to experience demonstrations soon. On a more forward thinking note one can but wonder if this is all sustainable. Clearly it is not. The population of the world is increasing. Oil is dwindling, we are told, and prices of nearly every commodity are sky-rocketing while unemployment is increasing. A rocky road ahead indeed.
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