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Real Prices of Energy

Published online by Cambridge University Press:  26 March 2020

Jenny Morel
Jenny Morel*
Affiliation:
National Institute of Economic and Social Research
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Abstract

During the last eight years there have been dramatic increases in the world price of oil. However, the incentive to use less energy comes from increases in the ‘real’ prices paid by consumers for fuel and the increases in these prices have been far smaller. This note examines the changes since 1973 in real prices for different fuels in different sectors in the UK and compares these price movements with those in some other Western developed countries.

Type
Articles
Information
National Institute Economic Review , Volume 93 , August 1980 , pp. 49 - 54
Copyright
Copyright © 1980 National Institute of Economic and Social Research

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References

page 49 note (1) I wish to acknowledge the assistance of G. F. Ray, under whose supervision this work was carried out as part of a larger project on ‘The real price of energy and its effects’ funded by the SSRC.

page 49 note (2) See Statistical Appendix, table 21: the Arabian light crude price, which has increased less than the OPEC average, increased from $2.10 in 1972 to $28.00 in the second quarter of 1980.

page 49 note (3) Copies of the series calculated are available on writing to NIESR.

page 49 note (4) The first of the big oil price increases was in October 1973 but most of the effect on prices to the consumer did not come through until the following year.

page 50 note (1) The increase in the Saudi light crude price was less than that of the OPEC average price, which increased from about the same base to over $31.00 in the second quarter of 1980 (NIESR estimate)-compared with the Saudi price of $28.

page 50 note (2) Deflated by the GDP deflator. Deflating by an export price index gives an increase of 122 per cent over this period.

page 52 note (1) Derived from the Digest of UK Energy Statistics table ‘Commodity analysis of purchases in the energy sector’, and the expenditure and consumption by final user tables.

page 52 note (2) Prices from OECD Energy Statistics 1975-77 deflated by CPI or WPI (output) from IMF International Financial Statistics (1st quarter figures were used to deflate the January prices).

page 52 note (3) Including coke and other solid manufactured fuel.