America gets tanked up courtesy of El Nino

You have to ponder what would happen if cars could run on cappuccino or, for that matter, bottled water. What a catastrophe. Americans, at least, would be begging for a return to smelly old petrol (or gas, as they call it here).

Tanking up has always been gentler on the wallet on this side of Atlantic, largely because American gasoline taxes are so much lower than their equivalent petrol taxes in Britain. Americans guzzle gas because it is cheap.

Never, however, as cheap as it is now. Thanks to a combination of factors, including the effects of El Nino, petrol in some corners of the United States is now selling at 80c a gallon or less.

That is about 50p. If inflation is taken into account, the average price for a gallon of petrol in the United States is now at the lowest level since records were first kept, about 40 years ago.

American drivers have never had it so good. "The decline since September qualifies as a price crash," says Trilby Lundberg, publisher of the Lundberg Survey of petrol stations nationwide. "It's just wild".

To understand quite how wild, consider this: while this correspondent, if he looks hard enough, can find petrol at less than a dollar a gallon, he is also paying $2.79 every morning for a small-size cappuccino at his local mid-town Manhattan coffee bar.

A bottle of mineral water is just under $2.

On the other hand, you might just compare the pump prices here in America with those in Britain.

You cannot find 80-cent-a-gallon petrol everywhere in the US, however, because the tax levels vary between the states. While garages have been seen posting 75 cents in Georgia, in Connecticut a gallon of regular is still around $1.30. On average, prices across the country have dropped by around 15 per cent since last autumn.

While competition between garages is important, the underlying cause is a glut of crude oil on the world market, which in turn is the result of numerous events.

Among those have been production levels set by Opec that have simply overtaken demand. The drop in demand, meanwhile, can be traced to to different sources, including economic turmoil in South East Asia.

Then there is the effect of El Nino, which has blessed North America with an unusual winter: tempestuous and wet for many, but also exceptionally warm. Heating-oil demand has dropped further, contributing to the glut in crude.