This week the International Energy Agency (IEA) has said it believes more people around the world will now turn to electric vehicles (EVs) because increasing oil prices will soon lead to record high costs for fuel.
As detailed in a report from The Guardian, the global energy watchdog has also claimed how this consumer shift to EVs could bring a number of benefits. Most notably, it will help to create greener roadways and tackle climate change.
At the same time though, the organisation has also stated that the higher fuel costs may then slow down global economies – which could be particularly challenging for nations that are already struggling with the financial effects of the pandemic.
Increasing demand is causing a surge in prices
The reason for rising oil prices stems from how worldwide demand has surged by as much as 3.2m additional barrels a day, as Covid restrictions start to ease in many countries. This has left producers struggling to keep up and has in turn seen costs going up by ‘two-thirds to highs of $77 a barrel’ – which the IEA believes may cause market volatility, unless major oil firms start pumping more.
To give a clearer idea of just how much the demand has changed in recent weeks, it had previously fallen ‘at its steepest rate since the second world war after the outbreak of coronavirus, from 100m barrels of oil a day to just over 91m barrels’. However, based on current rates ‘demand could rebound at its quickest rate on record to reach pre-pandemic levels by the end of 2022’.
The green light at the end of the tunnel
The Guardian’s report also explains that ‘US drivers are already facing record high prices to fill up their tanks due to rising oil market prices.’ What’s more, the price per gallon reached ‘an all-time high of $3.14 on Monday, and analysts have warned that the price could climb to $5 a gallon’.
With further rises predicted, the IEA believes consumers will instead opt for electric vehicles – as ultimately, they will be more affordable to run. In addition to this, more EVs would mean transport emissions and pollution would be reduced, which would help meet carbon goals such as the ‘net zero’ targets we have in the UK.
As aforementioned though, the potential issues from this would be that fuel prices would still continue to rise and push up global inflation, which might significantly hinder economic recovery from the pandemic.
A spokesperson for the IEA offered their comments on the matter stating that: “While prices at these levels could increase the pace of electrification of the transport sector and help accelerate energy transitions, they could also put a drag on the economic recovery, particularly in emerging and developing countries.”
Other ways to go green and save
While there’s no denying the risks posed by inflation would be problematic and cause difficulties, the move towards a greener lifestyle would be beneficial for us all.
On top of this, whether you’re considering an EV or not, there are other ways you can go green now and help save on money at the same time. Simple energy saving tricks like switching to LED lights in your home or cutting down on your time in the shower can lower your energy bills and reduce your consumption.
In addition, you may also want to run an online energy comparison to see what tariffs are available that are 100% renewable, or which feature a greener fuel mix. Many of the best energy suppliers in the UK offer these tariffs right now and it’s also likely that you’ll be able to save by switching to one of them – in some cases hundreds of pounds.
With an online energy comparison service, you only need to provide a few personal details and some information about your energy use. Then, in a matter of minutes, you’ll be able to see what the best energy deals are right now near your location. Plus, you’ll get to see what extras you can get with your green tariff, as well as a breakdown of how much you could save on your energy bills.
Find the best energy deal for your home
TechRadar has partnered with MoneySupermarket to help you find the best energy deals in your area. Our energy comparison tool takes less than five minutes to use, and could save you hundreds on your energy bills. Save money now
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