Yesterday’s big petrol summit seems
to have achieved one of its aims and stirred up quite a bit of debate about the
rising price at the bowser. Henry is particularly interested in proposals to
allow ethanol blending in fuel and urges a sober debate on the issue. The
upside – cheaper fuel and a possible boon for the sugar cane industry up north
(among others) with minimal – if any – impact on performance.

The downside –
engine damage if blending is not carefully controlled. Our friends from the US
have been blending ethanol for many years (with an added anti-freeze benefit)
and have some very happy corn farmers throughout the Midwestern states as a
result, but Henry notes that amounts of greater than about 10% have been known
to cause problems.

The prices here – as high as they
are – are still quite reasonable relative to other parts of the world, as The
Agepoints out. Nevertheless, the rising price of oil certainly hasn’t worried
the IMF, who project Global growth of 4.3% in 2006 and lower inflation in
aggregate, stunning Alex Erskine:

“So what about the claims that oil
price hikes are sucking the life out of the economy? Apparently at yesterday’s
“Petrol Summit,” a claim was made that the recent hikes in petrol prices are
about equivalent to a 2 percentage point interest rate rise – and all in the
space of a couple of weeks. If true, it’s hard to imagine how it wouldn’t
impact on the economy.” Read on here.

Meanwhile Henry’s editor, Peter
Jonson, reports that productivity growth in China has
virtually unlimited potential, coming off a low, and for Peter, frustrating,
base. Read on
here.