A Review of Issues Pertinent to Liquid Fuel Policy

This paper provides a schematic review of economic issues pertinent to liquid fuel policy, with emphasis on the Australian setting. Pricing and depletion are considered in the context of possible disruption of import supplies. Subsequent sections deal with substitutes, R & D and exploration, storage, and demand‐side intervention. Consideration is given to the arguments that conservation is intrinsically desirable or, conversely, that domestic energy supplies ought to be priced ‘reasonably’ to consumers. Concluding remarks address the efficiency‐equity conflict in domestic oil pricing, oil as a ‘political’good, and the relation between political and economic costs of import dependence.