Petrol at four times the price? On yer bike, son

They said it was going to happen. And they were wrong. Well, not really wrong - only when it happened, no one noticed. "Peak oil." Said to occur when the world could no longer produce as much oil as it needed each day.

So if the world was using X trillion barrels of oil each year, yet the oil wells could only produce, say, X trillion minus 1 barrels, then that was "peak oil". Production had reached its peak.

For a long time, the amount of oil used has been increasing steadily, while the amount being produced out of the ground is falling, even though there is plenty more oil. We are not finding those new oil wells fast enough. They said we wouldn't know it had happened until a few years after it occurred.

The fear is that markets react very swiftly and radically to shortage of commodities. In 1979, when Opec cut down on shipments of oil from the Middle East, there was a shortage of supply of only about 5 per cent. This caused the price to rocket by about four times overnight.

Traders have been likened to "reef fish"; not reacting to facts, just to what everyone else is doing.

In 1979, Opec eventually relented to Uncle Sam, who was seen weeping piteously, curled up in his three-ton Cadillac parked in his driveway, cuddling his rifle.

The supply was resumed, and the price relaxed. But if supply was to be insufficient because of natural means - as in "Hey boss, we're pumpin' as hard as we can, the oil just ain't comin' outta the ground fast enough" - then there will be nothing to stop the price from rocketing out of control. No "friendly" Arabs, no sad songs.

Energy commentators tell us that the only reason this catastrophe didn't happen in the years after 2006 when peak oil was supposedly reached, was that the world, independently of the oil supply, coincidentally went into recession. Oil demand rises and falls exactly in line with economic activity.

Economic activity is increasing again, so the world waits on tenterhooks to see what will happen with the oil supply, and thus the price.

The Petroleum Demand Restraint Act 1981 allows the government to ration fuel and take other emergency measures if fuel becomes scarce.

Remember the "carless days" of the seventies? No kidding, every car had a sticker on its windscreen stating which day of the week it had to be off the road. Fines were severe. Petrol stations were closed at the weekends.

Officious people were walking around asking anyone in a car: "Is that trip really necessary?" Overall savings in fuel were about 2 per cent. Public anger rose 2000 per cent.

I am not expecting any marked increase in wisdom from the current bureaucracy.

Should there be a real shortage of oil, the authorities will ensure that fuel is kept aside for the emergency services, hospitals, police, military, power/phone companies. Fuel for you and me may be priced out of our reach.

And worse, the shortage of fuel is not just about being able to drive to the beach on Sunday. Everything we consume is reliant on a supply of economically priced fuel: from the farm tractor, to the header harvester, to the bread delivery van, to the supermarket staff getting to work.

If the government won't make plans, then we had better. I expect the price of second-hand bicycles to rocket over the next few months.