After an NHS-wide red alert as a result of the direct action cutting off fuel supplies it may seem perverse to suggest some positive economic - and health - reasons for high fuel prices. But here goes.

First, fuel has a number of characteristics that actually make it a good candidate for taxation. To start with, the demand for fuel is relatively price inelastic: a rise in its price leads to only a small proportional decline in its consumption. In other words, we like petrol so much we're not put off buying it, even if the price goes up.

In these circumstances, taxing fuel does not do too much harm to consumers' choices about consumption. Of course, as recent Europe-wide protests show, consumption may not be overly affected but this does not mean that consumers like paying higher prices as a result of taxation - no one likes parting with money for anything.

Nevertheless experience shows that, despite this, consumers' preferences (for fuel consumption) are not much dented by taxation.

Fuel taxation is also relatively equitable. Despite the fact that the tax is flat rate for each fuel type, the rich tend to consume more fuel than the poor, so they end up paying proportionately more tax. Moreover, for some groups deemed particularly needy, there is exemption from nearly all fuel duties.

High taxation on fuel has an intergenerational equity aspect as well.

Because oil reserves will eventually run out, raising fuel prices now limits consumption today, extending fuel reserves and leaving more for future generations. In this way the total benefits to be derived from the world's limited oil resource are spread a bit more evenly across the generations.

There are also good reasons to try to limit the consumption of fuel through taxation for the sake of health and the environment. This is because the full costs of consuming fuel do not just fall on the immediate user, but are also born by those 'external' to the fuel market. Raising the market price of fuel by imposing a tax brings prices more into line with the true costs of using fuel.

Of course, such a move is not popular with fuel users, but makes sense in economic terms as it corrects the failure of the fuel market to arrive at an efficient price.

An important aspect of the externalities argument for taxation is how the government actually uses the revenue raised from fuel taxes: does it close the loop between the tax and those bearing the externalities?

Currently, duty on fuel (not including VAT) raises a substantial amount of money for the public purse and hence public services - over£23 billion this year. This contributes to spending on healthcare and environmental initiatives. But whether fuel duties are adequately channelled to those bearing the external costs of fuel use is an open question.