"Reality check" needed on oil use

"Reality check" needed on oil use

Finance Minister Michael Cullen's "reality check" on the economy should include a "reality check" on oil use, Green Party Co-Leader Jeanette Fitzsimons says.

"Dr Cullen has called for a reality check on an economy he says has 'come off the boil' at a time Statistics New Zealand is announcing an annual trade deficit of $7,102 million - the highest on record," Ms Fitzsimons says. "His reality check should look more closely at reasons for the deficit; and long-term effects.

"Imports of merchandise goods are up $3004 million and of that nearly half is petrol and petroleum products at $1217 million. These kinds of figures will get worse with a lower New Zealand dollar - our high dollar insulates us from extremely high petrol prices."

The high cost of oil and its contribution to New Zealand's deficit is not a temporary phenomenon, Ms Fitzsimons says.

"It makes sense, as most experts predict petrol prices to rise long term, to have an urgent official reality check on our dependence on oil. We need to boost public transport rather than build motorways, import cars which do more kilometres to the litre and drastically improve our efforts to become self sufficient in energy with alternative energy sources.

"The world is close to maximum oil production - called 'peak oil' - and is unlikely to be able to expand supply to meet growing demand from China and India. At present our cars, jobs, food supply and even our health services all rely heavily on oil. We can't continue as we are without a real `reality check'," Ms Fitzsimons says.