British company bosses have warned of inflation in fuel prices within the next five years, which could adversely impact the economy, and urged the government to speed up the switch to alternative energy sources.
The Industry Taskforce on Peak Oil & Energy Security, comprising a consortium of British businesses like transport company Stagecoach, the utility Scottish & Southern Energy, the retail specialist Kingfisher and Sir Richard Branson's Virgin Group, has warned of the country facing energy security problems.
Delays to deep water oil production in the wake of the devastating Gulf of Mexico spill could reduce global capacity by one million barrels of oil per day, increasing the chances of an 'oil crunch' in the coming decade.
"This will lead to much higher sustained prices which will in many ways rival the impact of the credit crunch of 2007 on UK growth, jobs and stability," Sir Richard Branson, founder of Virgin Group, said.
"The time to take out our insurance policies against such an outcome is now. We must do this to avoid the horrible shocks to the UK economy which will be mirrored in many other parts of the world," Sir Richard added.
A barrel of oil is currently around $80 a barrel, well below the last peak of $145 two-and-a-half years ago.
The group emphasised improved government support for renewable energy technology and energy efficiency measures to ward off the threat.