Iranian bank chief blames taxation for high oil price

Iranian Central Bank Governor Mohsen Nourbakhsh yesterday hit back at ongoing attempts by Western governments to lay blame for high fuel prices at OPEC's door. Nourbakhsh, addressing an international conference in London on investment in Iran, stressed that when oil prices collapsed in 1998 'producers were told to adjust their economies, while consumer governments strengthened their economies by increasing taxes.'


LONDON�Iranian Central Bank Governor Mohsen Nourbakhsh yesterday hit back at ongoing attempts by Western governments to lay blame for high fuel prices at the door of the Organization of Petroleum Exporting Countries (OPEC), the organization's news agency, OPECNA, reported.

Nourbakhsh, addressing an international conference in London on investment in Iran, claimed that when oil prices collapsed in 1998 "producers were told to adjust their economies, while consumer governments strengthened their economies by increasing taxes."

"Iran always believed stability was crucial for both consumers and producers," the bank chief said, "but shifting responsibility for price rises on to oil-producing countries in unfair."

His criticism finds an ally in industry analyst and Oxford Institute for Energy Director Robert Mabro, whose calculations suggest that the "market-cum-OPEC component" of increases to fuel prices in the UK over the last 8 years came out to 4.8p�compared with 30.18p in taxes.

"The fact that world oil prices are the outcome of complex interactions between futures and physical markets for both crude oil and petroleum products, and OPEC responses to these markets' confusing signals, is of no great interest to politicians," wrote Mabro, in a letter to London's Financial Times newspaper yesterday.

Western governments, he believes, are loath to admit that taxes are responsible for record fuel prices because it would deprive them of a "convenient foreign target to blame."

Meanwhile in Caracas, Saudi Arabian Petroleum and Mineral Resources Minister Ali I. Naimi countered reports that OPEC had exaggerated its spare production capacity, pointing out the at his country could pump an extra 2 million b/d of crude on to the oil market if needed.

"We perhaps are able to produce the last barrel of our spare production capacity in 90 days. But we are able to produce the first 1-1.5 million b/d of the spare capacity in less than 30 days�and when we say 90 days we mean that the last barrel will be produced on day 90," Naimi was quoted as saying in an interview yesterday in the Pan-Arab daily Al Hayat.

Noting that OPEC could trigger its oil price band mechanism before the Nov. 12 meeting in Vienna of the organization's ministers if prices remained overheated, Naimi suggested high oil prices were the result of "doubts cast on oil supplies," and market speculators.

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