Australia: McNamara predicts $2 a litre petrol for Christmas

PETROL will top $2 a litre in Queensland by the end of the year, the head of a special State Government committee has warned.

Andrew McNamara, the Member for Hervey Bay, said soaring international oil prices would lead to rises much more drastic than the $1.50 a litre predicted last week.

The Labor backbencher is chairman of the Government’s energy committee, which is investigating Queensland’s vulnerability in the oil crisis.

He expected oil would skyrocket from recent highs of $US75 a barrel to more than $US100 before the end of the year.

“The price of petrol — and pesticides, plastics, pharmaceuticals, packaging and food — is about to go into a price surge,” Mr McNamara said.

“That will produce a recession that won’t end until we reshape our economy and society to reduce our reliance on oil, in proportion with the growing gap between production and use.”

The Sunday Mail reported last week that economists believed petrol prices could soon top $1.50 a litre for unleaded petrol. Prices jumped from $1.18 in Brisbane on Wednesday morning to $1.36 by the afternoon.

“These rises are not temporary. This is the beginning of the end of cheap energy,” Mr McNamara said.

He based his comments on belief world oil production would peak and then decline over 10 years.

This represented the “most serious and immediate challenge” to our prosperity, as alternative energy sources could not make up the shortfall.

Copyright 2006 News Limited.