20-11-05
The world's top energy producers, under pressure
to meet global demand, have called instead on leading consumer states, mainly in
Europe, to cut taxes on oil to alleviate hikes in prices. OPEC, which supplies
about 40 % of world oil, and heavyweight member Saudi Arabia, made the call at
the opening of the permanent seat of the International Energy Forum (IEF) in
Riyadh.
Saudi King Abdullah, whose country holds the world's largest oil reserves, vowed
to continue to provide enough supplies, but called on leading consumer states to
cut taxes on petroleum products.
“The policy of the kingdom is based on reaching a reasonable and fair price
for oil and to provide enough supplies to all the consumers,' he said at the
opening, which was accompanied by a forum on the energy industry.”
“But all the efforts of the producing countries will not bear fruits if they are
not met with a positive position by the main consumer states,” he said. “These
states should alleviate the ordeal of their citizens by cutting taxes on
petroleum products when prices increase,” he said.
OPEC chief and Kuwaiti Energy Minister Sheikh Ahmad Fahd al-Sabah also said
“we will have many meetings and we will try' to seek tax cuts in consumer
countries”.
“This is a financial issue of their own, but everyone should know that in
Europe, 80 % of the price [of oil products] is made up of taxes,” he told. “They
ask for an increase in production, and we ask for a cut in taxes... which are
one of the reasons for the hike in prices,” he said.
But French Minister of Finance and Economy Thierry Breton claimed that high
consumption in industrialized countries is to blamed for high prices rather than
high taxes.
“It is not a problem of taxation. We do not want to give the impression that we
want to facilitate consumption here or there. Instead, we should limit
consumption in energy economies,” he said.
The forum was the first major gathering for world's energy consumers and
producers after oil prices hit a historic high of $ 70.82 a barrel on Aug. 30,
before retreating to around $ 57 at present.
For his part, Qatari Energy Minister Abdullah bin Hamad al-Attiyah said the
energy market may see increased oil supplies in the second quarter of 2006,
possibly pushing down prices.
“There will be more oil floating and this might be a concern. We have to deal
with it very carefully,” Attiyah told.
“Now so far, if we keep the price as it is, it will be okay. But what will
happen in the second quarter,' when demand usually decreases due to the end of
winter in the northern hemisphere.”
Attiyah said OPEC, which meets in Kuwait in December, was expected to study
'important' issues, particularly energy demand.
“We have to tackle some issues; we should not be taken by surprise,” he said.
Saudi Oil Minister Ali al-Naimi said supply currently exceeds demand and that
there is no need “for extra measures”.
“OPEC offered an extra 2 mm [per day] in September, but no one responded,” he
said blaming again the 'world refineriesfor not being able to fulfil consumer
needs'.
The day-long closed forum, meant to smooth market volatility and ensure
stable prices, was attended by about 20 oil and economy ministers from the
leading producing and consuming nations, as well as executives of international
oil majors.
Amid tight security measures, the forum also gathered energy and economy
ministers of the US, France, the UK, Germany, Mexico, Iraq, Iran and the United
Arab Emirates.
Established in 1991, the IEF serves as a vehicle for dialogue between oil and
gas producers and consumers on vital issues like energy prices, security and
supplies as well as technological and environmental issues.
US Energy Secretary Samuel Bodman, visiting Riyadh as part of a four-nation tour
to the oil-rich Gulf region, said it will take oil producers at least two years
to provide enough oil that would ease concerns in the market.
Source: AFX