News - BMW

Over the barrel

Get used to it: BMW AG chairman Helmut Panke told journalists in Sydney last week that oil prices of "somewhere in the 50s ($US per barrel) is a level we are all going to have to live with".

BMW boss reckons global oil prices will fall - but not below $US50 a barrel

BMW logo8 Sep 2005


BMW AG chairman Helmut Panke believes the world will have to get used to high oil prices but says technology and market forces will ensure that oil will not run out.

Dr Panke told journalists in Sydney last week that he believed oil prices of $US60 and $US70 a barrel were not likely to continue but a price "somewhere in the 50s is a level we are all going to have to live with".

He said today’s oil prices were "a combination of demand on one hand and speculation on the other hand".

"Other factors include weather events in some parts of the world and with (hurricane) Katrina in the United States there is going to be some scarcity of supply there," he said.

"But in all reality we are going to have to be prepared to live with oil prices that will be significantly higher than anybody thought (would be possible) at the same time last year.

I don’t think we will have the situation where oil prices go back down to the 30s or below 30 like many predicted during 2004.

"On the other hand, I don’t think we are going to have the high 60s or $US70 a barrel in the mid to long-term," he said.

Dr Panke added that predictions of world shortages of oil caused by increasing demand from China and then India were overstating the threat.

He said that alternative oil resources "that are currently not being tapped and used will now be exploited".

"It is going to be a different picture when you pay $50 for a barrel than when you pay $25," he said.

"With oil prices at these levels suddenly it is attractive to generate synthetic fuels, in the case of Australia, out of coal.

"In the case of stationary applications you can replace the use of heavy crude oil. For things like home heating there will be a shift because of price levels. Why should not all the coal resources in Europe and North America be used for house heating instead of using oil?"At the same time technology ... is now available in America and here in Australia to develop synthetic fuel from coal.

"The engineering and scientific minds are always going to come up with solutions.

"We will not run out of oil. We will not get to a standstill where nothing happens," he said.

Hybrids not for everyone - BMW

BMW chairman Helmut Panke has warned that hybrids were not a panacea to rising fuel prices, were a niche vehicle and not worthwhile beyond congested cities.

But Dr Panke told a briefing of business writers in Sydney that all car-makers would have at least one hybrid in their line-up within the next five to eight years.

"When you look at the fuel efficiency of hybrids under typical driving conditions there are vehicles in the market that are far more fuel efficient than the currently available hybrids," he said.

"A BMW 3 Series diesel or a four-cylinder petrol car under a typical mixture between urban and rural driving are more fuel efficient than a hybrid car.

"But if you are focussing in typical urban driving then hybrid is a niche application which for that purpose makes a lot of sense.

"I would predict that between the next five to eight years, every manufacturer, not just the European and the Japanese, will have at least one hybrid vehicle in their line-up.

"But hybrid is not going to be the complete portfolio solution for the vehicle because for someone driving (on the open road) there are disadvantages," he said.

Share with your friends

BMW articles

Motor industry news

GoAutoNews is Australia’s number one automotive industry journal covering the latest news, future and new model releases, market trends, industry personnel movements, and international events.