Venezuelan minister proposes oil price information campaign

Venezuelan Energy and Mines Minister Al�odr�ez Araque told Venezuela's El Nacional newspaper that, during the next Organization of Petroleum Exporting Countries' ministerial conference, which starts Sunday, he will propose the launch of a worldwide information campaign aimed at explaining the real issues behind oil prices.


CARACAS�Venezuelan Energy and Mines Minister Ali Rodriguez Araque said that during the next Organization of Petroleum Exporting Countries' ministerial conference, which starts Sunday, he will propose the launch of a world information campaign aimed at explaining the real issues behind oil prices.

In an extensive interview published in Venezuela's El Nacional newspaper, Rodr�ez, who is OPEC conference president, said speculation on the international oil market and high taxes in industrialized oil-consuming countries are major factors in the behavior of world oil prices.

"There are days when up to 80,000 contracts are purchased, which represent some 150 million bbl�in other words, double the world oil production," he said, speaking of oil price speculation on world futures markets. "What are we going to do together to reduce the high level of speculation that fills the pockets of some people?

"Regarding this issue, there are people who suggest that, in order to balance the market, production must be increased. Of course, I believe that production will have to be increased�but up to what level?" he asked.

The price-boosting speculative market must be studied by OPEC and the heads of state, Rodr�ez said, "because it would be dangerously ingenuous to think that, today, with a simple increase in production, the problem of market stability will be resolved."

Rodr�ez says OPEC has fulfilled its obligation by responding to "real oil demand." The consuming nations, he said, contribute to increasing product prices for their own citizens in taxes and environmental measures.

The minister said, "What punishes the end consumer is not the raw material�not even the product itself. It is the taxes. In the principal industrialized countries, the average tax amounts to about 60% [of fuel prices]. The measure of the petroleum component is 12%. The rest is distillation and commercialization."

Commenting on how oil producers hope to get their message across regarding the real factors that affect oil prices, Rodriguez said, "One of the proposals that I am taking to the Vienna meeting deals with carrying out an intense world information campaign regarding these realities. We cannot pressure for them [importing countries] to lower taxes, because that would be disrespecting the sovereignty of those countries. If there is anything that we are jealous about, it is the sovereignty of states. However, we are obliged to inform the world population of what is happening on the issue of prices. Above all, we are determined to clarify that the problem does not depend exclusively upon OPEC."

The minister was also quoted by El Nacional as saying that such a campaign should be carried out by OPEC as an organization and also by each member country individually, "because we all are interested in clarifying these matters."

Rodr�ez told the newspaper that "it is difficult" to fight speculation on the oil market "if there is no accord between producers and consumers�I believe that the meeting that is going to be held in Saudi Arabia during the first half of November, the so-called meeting of producers and consumers, is very important."

He added, "The price band, if applied in a disciplined way, contributes towards reducing the level of speculation because the behavior of prices can be predicted. But that alone is insufficient. That is why I believe that producers and consumers must reach an agreement.

"Some analysts believe that oil prices could reach $40/bbl by the end of the year. We, as producers, will do everything possible for that not to occur. But, I insist, the problem does not involve only OPEC...It does not [even] depend principally on OPEC," he was quoted as saying.

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