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ARABS-OPEC - Sept. 15 - West Blamed For Fuel Cost.

Kuwait warns oil prices could go higher with the onset of winter in the northern hemisphere making new demands on fuel. Officials say Kuwait was already producing at full capacity and call on Western governments to lower their fuel taxes. (Amongst Arab producers, only Saudi Arabia and the UAE are thought capable of pumping significantly more oil. GCC states, like Kuwait believe they have already done enough to help the West. The emirate is home to the Burgan oil field, one of the largest in the world. Since OPEC's latest production increase, it has been pumping at nearly full capacity which is why prominent Kuwaiti MPs like Abdullah Naibari are baffled by some of the comments coming from Western leaders.)

Naibari says: "I was amazed to listen to Tony Blair coming out on the TV blaming or refusing to bring down the tax rates and saying that the solution for prices is for the OPEC countries to produce more", adding: "This will not solve the problem. If crude prices came down by say, 25% or came down to US$25 that would probably only reduce the prices by a few cents". Analysts say even if OPEC could put more oil quickly onto the market, high fuel taxes would still keep consumer prices high. They say Gulf producers earn just a fraction of the price paid by Western consumers and they are exhausting their only major natural resource. Kuwait's Minister of State for Foreign Affairs, Sulaiman Al Shaheen, reflects a wider Gulf view that it is time to lower those fuel taxes. He says: "Both parties have to bear the responsibility. Now we - or at least the producer countries - speak about the taxes", adding: "And this is your issue in Europe. You have to find also the solution for this problem within your countries". (Petrol costs next to nothing for the GCC state consumer.)

Also on Sept. 14, Libyan leader Qadhafi accused industrial countries of abusing oil producing regions and failing to show sensitivity to those areas whose oil drove the world economy. In a letter to government leaders about the latest oil price increases, Qadhafi said: "The policies adopted by superpowers towards these regions are crazy, rash and threatening and these areas have become very hot and explosive". Qadhafi cited the 1980-1988 Iran-Iraq war and the 1991 Gulf war as examples of the tensions in these areas and called on the industrial world to handle oil producers with care. The Libyan leader added: "A dangerous hostile scenario is being implemented continuously against Nigeria and its territorial integrity and against Algeria and Indonesia". (Libya's Abdullah Salem El Badri is Alternate President of OPEC). Meanwhile, Crude oil prices increase to US$36/ barrel in late trade in New York.
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Publication:APS Diplomat Recorder
Article Type:Brief Article
Geographic Code:0OPEC
Date:Sep 16, 2000
Previous Article:ARABS-ISRAEL - Sept. 15 - US To Break Peace Deadlock.
Next Article:ERITREA - Sept. 15 - UN Approves Deployment Of Troops.

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