As a coda to Robert Halfon’s piece on the relationship between tax and petrol prices, it’s worth noting that a substantial proportion
of European sweet crude (the type of crude oil commonly refined into petrol) originated in Libya. Soon after civil war broke out in Libya, Saudi Arabia increased its
oil production and the IEA released some of its reserves to cover lost
Libyan production in order stop a spike in the wholesale oil price, which benefits rogue members of OPEC like Iran and Venezuela. But not all of that output was sweet crude, so the
collapse of Libyan exports has had a deleterious effect on petrol prices, which have reached 150p/litre in some British garages.
Once the Libyan revolution subsides, assuming that it does, the new administration will have to restore production. The FT reports that oil accounted for more than a quarter of Libyan GDP in the last year of Gaddafi’s regime.
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