The aftermath of Katrina has affected more that just New Orleans and the surrounding gulf coast. There are huge financial implications associated with the catastrophe, from the initial humanitarian aid to the rebuilding and repairing needed to get the local area back on its feet. Eight oil refineries shut down as a result of Katrina could take many months to restart. The Gulf Coast is a prime supplier of oil, through pipelines now shut due to lack of power and ocean-going barges unable to load from ports eradicated by the storm.
From a global perspective, the loss of oil production in the area is sending shockwaves through the world's financial institutions and economies. Even before hurricane Katrina's damage to oil production the price of fuel has increased to a major degree. The following data compares price increases from September 2004 to August 2005 in the United States of America and the United Kingdom.
US Fuel Price Increases
September 2004
Unleaded: £0.28 ($0.48) per Litre
Diesel: £0.29 ($0.51) per Litre
August 2005
Unleaded: £0.38 ($0.67) per Litre
Diesel: £0.39 ($0.68) per Litre
UK Fuel Price Increases
September 2004
Unleaded: £0.87 ($1.59) per Litre
Diesel: £0.83 ($1.52) per Litre
August 2005
Unleaded: £0.96 ($1.76) per Litre
Diesel: £0.94 ($1.73) per Litre
In the United Kingdom, motorists are burdening more fuel increases with the price of 1 litre soon to exceed £1 ($1.84). About 65% of the price UK motorists pay goes to the government in tax so the additional revenues generated are unlikely to direct the government to rebalance tax levels on fuel unless the wider economy comes under threat.
"...If it keeps on rainin', levee's goin' to break
And the water gonna come in, have no place to stay..."
When The Levee Breaks
Memphis Minnie
recording of 1929 written after the devastating Mississippi flood of 1927
My next visit to fill up my car is once again bound to force a whimper from my wallet especially when the litre dial spins at the same rate as the total cost dial. But as my day to day problems range from the extra few pounds I have to pay on the weekly fuel to what colour to paint my children's bedrooms, I consider myself very lucky and certainly very selfish... shame on me!
About the Author
Gordon doesn't usually like to talk politics unless it involves money, he writes articles for the personal finance articles website www.search-4-loans.co.uk. He also maintains content on www.loansense.co.uk and www.the-loanshop.co.uk.
