Sunday, April 15, 2012


Also now fading from memory is the panic buying of fuel of a couple of weeks back - but as a refresher, it was announced a week before Easter that drivers of fuel trucks may strike, prompting government ministers to suggest panic buying (hard to believe, but true - Francis Maude even suggested filling up some jerry cans and putting them in the garage!).

The result was predictable - panic buying, queues everywhere, shortages and chaos.

So if this was so predictable, why on earth did the government do it?

There's at least two reasons which are quite plausible to my mind. The first is bumping up GDP figures, and the second is managing public opinion.

The first was noted by the Liberal Conspiracy blog (although strangely I can't find the link to it anymore...) - the panic buying happened in the last few days of March, and March being the third month of the year, is the last month in the quarter, and we calculate GDP by the quarter. 2011Q4, the previous quarter, saw negative growth, and hence if this quarter also saw negative growth (and the OECD had said they expected it), then this would mean the UK was back in recession.

Hence if people were to buy lots of petrol, this would count as lots of output sold, expenditure made, incomes earned (the three ways to calculate GDP). Is it possible the government decided it could influence GDP figures to ensure that the UK didn't enter a recession?

A perhaps slightly less far fetched suggestion is that the government was instead trying to manage opinions.

The simple fact is that two sides are trying to bargain some pay agreements, and hence the media management of both sides is to try and get the public onside.  You may have seen blurbs to the following effect on Facebook:

So let me get this right, 2000 tanker drivers are complaining that 45k a year and a final salary pension, is too little for a dangerous job? Yet our boys and girls out in Afghan get 24k or there about to get shot at? Round the 2000 tanker drivers up, send em out to Afghan, then ask 2000 soldiers if they want to earn 45k a year driving a fuel tanker about. Problem solved.... repost if u agree.
On the other hand, the truckers do have a story to tell too, again found via Liberal Conspiracy (a leftie blog which I'd treat with some caution - they don't have the kind of economics tuition you've already got in your first year alone at university).

The government in its announcements led to panic buying and general public resentment against the fuel tanker drivers, hence succeeding in its objective, to get public opinion on their side against any actual fuel strike that might happen. If the representatives of truck drivers realise how unpopular any decision to strike would be, their bargaining position is significantly weakened.

So, both possibilities are very much in the realm of conspiracy theory, but both are interesting and contain a good chunk of economics...

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