THE EDITOR, Sir:

THE VERY high price of oil has taken a downward plunge. This respite should give us time to prepare for the next cycle of high prices which may be back in under five years. Wise people use the years of plenty to prepare for the famine. Every time we are hit by high prices, we seek alternatives and plans for the future, but as soon as prices come down, we scuttle the plans and bask in the fool's paradise of believing that the low prices have come to stay. To those who will listen, the period of low prices will not be for long.

Suggestions for policy change

I would suggest that the following steps be urgently taken as a matter of policy:

Fix the official trading price of oil at US$50.

The difference between the actual price and the official trading price be placed in a stabilising and alternative energy financing fund.

Forty per cent of that fund should be used to finance alternative energy projects at interest rates not exceeding five per cent.

The other 60 per cent be held in trust to be utilised in keeping the official price at its preset value for as long as it can.

The US$50 is to act as a sort of damper on irresponsible consumption. Not that it will be a 100 per cent effective deterrent, but the economy is better able to afford this price structure than when it was being proposed that the price of gasolene should have been increased in order to drive down consumption.

Funding for energy projects

This strategy is aimed at establishing some predictability or stability to the pricing of electricity and transportation fuel costs. Even more important, it would provide a source of funding for alternative energy projects that could reduce our oil consumption. If we are to avoid the errors of the past, we have to fund alternative energy now, even though the saving may not seem attractive based upon the capital costs involved. That is why the interest rate has to be the alluring factor to make the scheme attractive. We have missed this tide before. We should endeavour not to miss it this time.

I am, etc.,

LUCIUS C. WHITE

1 Tankerville Avenue

Kingston 6