OPEC says that biofuels could push gasoline prices higher, according to a report on ICIS news quoting the Financial Times.
(Disclosure, I work for ICIS: About ICIS)
The reasoning behind it goes like this according to secretary-general Abdalla El-Badri:
biofuel production could prove unsustainable in the medium term as it competed with food supplies. In fact, food prices are poised for their biggest annual increase in 30 years due to biofuels.
This meant that the biofuel strategy mooted by Bush and European leaders would backfire because “you don’t get the incremental oil and you don’t get the ethanol”.
So we need to reduce our dependence on oil and drive more fuel efficient vehicles. Are El-Badri’s comments sensible or the hype of a pusher trying to ensure that he keeps his customers in line? Let me know.