SINGAPORE consumers, especially motorists, are naturally elated that crude oil prices have plunged almost 60 per cent since last June ("Oil price plunge: The good news"; last Friday).
Many expect the prices of related goods and services - such as electricity, petrol, diesel and air travel - to significantly decline.
They would then be able to have more disposable income to meet their other needs.
However, in a free market, when the price of something goes down, people generally consume more of it.
So we can expect motorists to change their driving habits and make frequent and longer trips, inevitably contributing more to congestion and greenhouse gases.
Also, efforts to conserve electricity in factories and homes will wane.
We may also become used to consuming more electricity, to the detriment of our future economy and environment.
No one really expects the price of crude oil, a finite resource, not to rise again to historic highs. History has shown that it is merely a matter of time before that happens, as the oil crises of 1973 and 1979 showed.
Hence, it is important that we do not get enticed by low oil prices to consume more energy now. We should step up incentives for companies to improve their energy efficiency.
Also, cheap oil will create challenges in the marketplace for clean energy if the Government does not take a long-term view and intervene.
We need to renew our commitment to becoming an energy-efficient and low-carbon society.
More crucially, we should not be taken by surprise when the next oil crisis hits us.
Edmund Lam (Dr)
Many expect the prices of related goods and services - such as electricity, petrol, diesel and air travel - to significantly decline.
They would then be able to have more disposable income to meet their other needs.
However, in a free market, when the price of something goes down, people generally consume more of it.
So we can expect motorists to change their driving habits and make frequent and longer trips, inevitably contributing more to congestion and greenhouse gases.
Also, efforts to conserve electricity in factories and homes will wane.
We may also become used to consuming more electricity, to the detriment of our future economy and environment.
No one really expects the price of crude oil, a finite resource, not to rise again to historic highs. History has shown that it is merely a matter of time before that happens, as the oil crises of 1973 and 1979 showed.
Hence, it is important that we do not get enticed by low oil prices to consume more energy now. We should step up incentives for companies to improve their energy efficiency.
Also, cheap oil will create challenges in the marketplace for clean energy if the Government does not take a long-term view and intervene.
We need to renew our commitment to becoming an energy-efficient and low-carbon society.
More crucially, we should not be taken by surprise when the next oil crisis hits us.
Edmund Lam (Dr)
