THE complaints of some OPEC members over the drop in crude oil prices (Viewpoint Wednesday) are unjustified.
Since the end of the Second World War the inflation adjusted price hovered around 20 dollars a barrel until turmoil in the Middle East in the early 70's doubled it to 40 dollars. This blip lasted until 1985 when the price returned to 20 dollars. In 2002 prices started to climb again peaking this year at 150 and are now on the way down to more normal rates. Iran may want 90 dollars or Venezuela 100 but the recent prices are an aberration and any country basing its national spending on these levels is heading for their own credit crunch.
The ordinary consumer will be waiting a long time for a fair fuel price. Crude oil costs only cents to extract in fact extract is the wrong word as in many oil fields it comes out unassisted. Over 90% of the producer's price can be tax and this is before our governments get their equally greedy claws involved.
As a barrel contains 160 litres even at the current 60 dollars this is less than half a euro a litre. Refining and markets costs little. These costs are more than doubled by tax to the 1.03 euros I paid just today at the pump. Unhindered by all taxes the oil companies could drop the forecourt price to 10 cents a litre and still make a profit.
Playa de Palma
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