As a result of the political unrest in the Middle East, world economists and financial experts are predicting oil may reach more than $130 US per barrel in the coming weeks.
Although the projections, may, on the surface, seem to promise a windfall of jobs, opportunity and funds in government coffers, we have some concerns with the burgeoning prices.
It’s not that we are pessimistic, but major banks are warning high oil prices could cause global shortages and derail the worldwide economic recovery. Experts say high oil prices can cripple developing nations, create high food costs and stifle fragile economies. All of this creates real suffering for the poorest, most vulnerable citizens of the planet, some of whom are forced to pay more than half of their income for food.
Although it’s not likely Albertans will suffer to that extent, soaring oil prices have a negative affect at home. The price at the pumps, which the Calgary Herald reported, Feb. 24, is likely to reach $1.30 per litre this spring, is simply the start.
Higher trucking costs ultimately lead to higher costs on virtually all goods - from bread and butter to clothes and vehicles.
Another concerning aspect is the fact that oil last reached similar levels in 2008, causing the Canadian dollar to rise and affecting exports. That was right before the worldwide economic downturn.
Now is not a good time for Alberta to be faced with any force that slows down recovery. With a January provincial unemployment rate of 5.6 per cent and a deficit posted at a projected $3.4 billion, Albertans need a stable environment.
However, we are pleased the jump in oil prices didn’t happen a month sooner. If it had, Premier Ed Stelmach might have been able to save his job. It’s proof that every rain cloud has a silver lining.
