'Oil crunch within five years'

BRIAN Souter, Sir Richard Branson and other business leaders will warn this week that the world is hurtling towards an "oil crunch" within five years that will match the recent financial crisis.

In a report due to be launched tomorrow, the Stagecoach chief executive and the Virgin Group founder will say that the world is running out of oil and that the coming challenges may be more serious than the credit crunch.

"The next five years will see us face another crunch – the oil crunch," the report said. "This time, we do have the chance to prepare. The challenge is to use that time well."

The report is compiled by the Industry Taskforce for Peak Oil and Energy Security, a group of British business leaders whose members include Mr Souter, Sir Richard, Scottish & Southern Energy boss Ian Marchant and Philip Dilley, chairman of consultancy firm Arup.

The group said the UK economy was particularly dependent on oil – from transportation to retail – and urged any new government to produce a coherent set of policies to enable the country to adapt to a future of high cost oil.

"Our message to government and businesses is clear. Act now," the group said. "If we don't, we run the risk of a return to the oil price shocks of the 1970s with all the inherent uncertainty and trauma that brought. Don't let the oil crunch catch us out in the way that the credit crunch did."

It said fuel scarcity could lead to shortages in consumer products, while the UK's energy security "will be significantly compromised". It said the impact of climate change made the challenge all the more urgent.