Hamish McRae: Higher petrol prices are here to stay

Let's start with the bad news. The only sensible assumption we can make about fuel prices is that they will stay high for the next 10 years - and may well go quite a bit higher than they are now.

Not only will crude oil gradually become scarcer and demand from China and India increase. Should there be any easing off of the price of crude, expect governments to claw that back in higher taxation - as Ken Clarke and Gordon Brown did with the fuel escalator during the 1990s dip in the oil price. Governments desperately need the revenue and unlike most other forms of taxation, fuel duty is almost impossible to evade. You can't brew your own in the back garden.

The better news is that the next 10 years will also see huge advances in fuel efficiency. In another 10 years, I predict that there will be lots of decent cars that will do 80mpg or more. Filling up will be more of a monthly chore than a weekly one.

The best early glimpse of the future is the Toyota Prius, the hybrid with the petrol motor and an electric one, which will do close to 60mpg in town. Small French diesels are almost as good.

What will happen next is that most makers will eventually produce hybrids and that meanwhile bits of the new hybrid technology will be incorporated into existing models. An example of the efforts to catch up by other companies are an SUV petrol/electric hybrid planned by Ford, while I see that on one of its small diesel powered models, Citröen is offering automatic stopping and restarting the engine when the car stops.

Other refinements that save power will come in too. Instead of power-steering run by an engine-driven hydraulic pump, it will be run by electric motors, which only cut in when needed. Air-conditioning will be all-electric and independent of the main engine, as on the Prius. Automatic transmissions will be refined to help engines run at their maximum efficiency as much of the time as possible. The systems developed when fuel was cheap will be replaced with energy efficient ones.

In one sense this is all very bad news for governments: the more manufacturers produce efficient cars, the less fuel revenue there will. But don't feel too sorry for them. They will fight back by devices such as electronic charging for road use - though if they are unable to stop people driving uninsured cars I'm not sure they will be smart enough to make road use charging work.

It will, on the other hand, be good news for the environment, and not just for pollution and global warming. As cars become radically more efficient that will change the way we think about them. Small example: I would not say it is fun to sit in a jam but it is more pleasant if the engine has switched itself off and only switches on when you move. The calmer driving becomes, the calmer drivers become, and maybe safer too.

Driving pleasure used to be about the tactile feel of a well-engineered product. From now driving pleasure will equally be about not having a sharp pain in the wallet every time you fill up. And this looks like being the genius of Toyota, which with a little help from the fuel price, is setting standards that will dominate the next generation.

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