TEHRAN A leading British bank Saturday criticized much of the deception being used to generate the current alarm about high oil prices.
"The continued rise in oil prices has become a major international economic and political issue, but there is a real danger of the significance of this being exaggerated," Stephen Boyle of the Royal Bank of Scotland said. He said there will be a "negative impact" on some companies, who are particularly dependent on oil, but that for many others "any problems will be the consequence of competitive conditions in their own sector." "For these business the high price of oil will be quite a convenient subterfuge," said Boyle, who is head of business economics at the bank.
He said the world economy had "changed considerably" since the last three major global recessions, which can be partly traced back to big increases in oil prices, but that there was "much less dependence on oil these days." With regard to OPEC ministers meeting in Vienna to consider further increases in crude supplies, Boyle said that there was "still a strong possibility of a winter price hike" regardless of the outcome of Sunday's meeting. In the meantime, the escalating protests against fuel taxes in the UK is causing petrol shortages across the country, it was reported Saturday. Shell, whose refinery at Ellesmere port, northwest England, was blockaded by protesting farmers and lorry drivers on Thursday night, warned that its filling stations in northern England face serious fuel shortages.
Fears that supplies may run out has also caused panic buying throughout the country and led to traffic queues at many petrol stations. The protest against fuel taxes in Britain has been prompted by concern about petrol prices rising by more than 10 per cent due to crude oil rates reaching 10-year high this week.
The British government, which imposes by far the highest petrol duties in Europe, reportedly has benefited by an extra 1 billion pounds ($1.5bn) in tax revenues from rising prices so far this year.
The escalating protests by farmers and lorry drivers saw refineries owned by Texaco and Elf in Milford Haven, South Wales, blockaded on Friday night. After the blockade at Ellesmere port, convoys of lorries in a go-slow protest also caused traffic chaos in northern England on Friday evening. Disruptions were also reported elsewhere. The protesters, following similar action by farmers, fishermen and lorry drivers in France, have warned of a "winter of discontent" if the British government does not meet their demand to reduce fuel taxes.
Also, a Greek oil and energy expert says high taxes on oil and profit-making by refineries in the West are the main reasons of high oil prices in Europe. Costis Stambolis told the Islamic Republic News Agency (IRNA) in an interview that taxes on oil in European countries vary between 45 to 68 percent. He cited the example of Greece where at one time taxes on oil hit the 70 percent mark. Stambolis, a specialist in solar energy, has been engaged in energy issues since thirty years. He owns a publishing house in Athens, Delos Press, which publishes a magazine Energia the only Greek-language monthly related with oil and energy matters.
he said that some refineries in Europe stockpile crude which they had purchased at a lower price and then sell it to consumers at the higher prevailing price. Referring to current oil price, Stambolis predicted that they might go up to $40. he said a golden rule'' has to be found to fix the oil price. He said oil price in the range of $20-25 would be ideal, adding that we have to live now with the price range of $25-35. The era of cheap oil is over,'' stressed Stambolis. He explained that the main problem is not the level of price but the rapid rate of change.
He said a gradual price rise can be absorbed by the economies of the industrialized states. Stambolis said high an oil price can be beneficial to both producer and consumer states. The producer states will have more revenue to invest in exploration projects, while in consumer countries there would be constraints on oil consumption and hence oil deposits would be maintained for a longer period. Stambolis told IRNA that an high oil price will also give incentives to industrialized countries to develop alternative sources, such as natural gas, solar and wind energy and hydrogen.
Referring to Greek-Iranian cooperation in the oil and energy sector, Stambolis said Greece can buy more oil from Iran and also participate in exploration of oil and gas projects in the Islamic Republic. He pointed out that there are big Greek private oil companies that can also finance projects in Iran. The Greek energy expert said Greece, Iran and Turkey can also cooperate in the natural gas sector following the improvement in Greek-Turkish relations. Stambolis said that in the decade 1989-99, average increase of oil consumption in Greece was 3.3 percent.
Greece imports about 17 million tons of crude oil annually.
Meanwhile, OPEC oil ministers have begun arriving here in Vienna for talks on Sunday that are expected to seal a third supply increase this year in a bid to rein in sky high crude prices, Radio Austria International reported on Friday. OPEC is under severe pressure from oil importing nations to ease fuel bills and temper inflationary pressures. Fuel protests in France and Spain and renewed calls in the United States for a release of government petroleum stocks have highlighted a growing impatience among OPEC's customers for the group to take strong action.
Cartel insiders say the producer group is likely to raise output quotas by about 700,000 barrels, just under three percent from limits now of 25.4 million.