But what could be the main reason behind this? Is it only due to the falling dollar? Because, when the value of the dollar falls, the nominal dollar prices of internationally traded commodities (gold, rice, oil etc.) increase, as more dollars are required to purchase the same quantity of the commodity. Likewise, a weak dollar should lead to higher commodity prices. In addition to this, there is an ever rising global inflation recorded during past 5-6 years. Economic activity around the world is scaling newer heights in post 2000 era and, on the other hand, the oil-supply side is almost constant. I am not an economist. Its just my perception over the issue that is being confronted by whole world and, the worst part is, there seems to be no authentic counter measure to this growing problem.
It seems that a stronger dollar and market-compatible strategy by USA over oil might provide some relief from current havoc. In addition to this, OPEC also should, probably, intervene and try to resolve the problem.
But there is second line of thought as well: are there some genuine concerns about long-term oil supplies prospects and the consequences of a fossil fuel economy? If that is the case, we must seek some alternative energy sources along with energy saving measures to deal with the crisis. There are some efforts being made in the quest for alternative energy since recent past. But, why this has not been done so seriously? Are there any deliberations for letting the problem grow up to a higher level? Probably, the price of oil has not reached to an alarming level. Earlier too, investment in alternative sources started back in the late 1970's, when the price spiked for a while. But the prices soon declined and stayed down for another 25 years and killed those projects related to alternative energy search. Investors may not invest again until they are quite sure that the price will stay up. So, has the oil prices reached up to a high enough value? I am not sure, but I have heard predictions of the oil prices reaching up to $200/barrels in near future.
But $200/barrels price? How is this world going to cope up with this? and what are the options for under developed countries like Nepal?
Well, nothing lasts forever! So, lets hope that the crisis also will not go infinitely. At some level it might become economical to develop substitutes. Indeed, even at the present price level, alternative sources of energy seems to produce genuine profits. The present crisis will also compel people to optimize the usage of fuel and opt for conservation, which is not bad thing at all.
Last month, I happen to experience the roller coaster ride at the "Universal Studios" in Osaka (Japan)...and I must confess that the ride was "scary". The "thrill" of roller coaster is not due to their speed, but rather due to their "accelerations". Lets hope that the accelerations in fuel prices will reverse as like in the roller coaster. But, for now, the rise continues...