Deputy Prime Minister John Anderson believes high fuel prices reflect the inevitable decline in the world’s oil and gas reserves. He expressed deep concern about the long-term future of oil and says fuel prices will have to be high enough to encourage more exploration.

Mr Anderson says the world could reach peak production of oil and gas far sooner than predicted because of the rapid increase in energy demands in China. “We are using stored energy left over from ages gone by at an alarming rate and it isn’t re-making,” he said.

“While people talk about new technologies and they say as soon as oil reaches a certain price everybody will switch over to hydrogen and what have you.

“The reality is that it may not be as simple as that and you have to wonder whether over the next decade we won’t start to get towards peak production and that could be a very interesting time and a very challenging time.”