Middle-east Arab News Opinion | Asharq Al-awsat

Oil Prices and Taxes | ASHARQ AL-AWSAT English Archive 2005 -2017
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King Abdullah Bin Abdulaziz”s recent comments about the correlation between the rise of oil prices in global markets and the rise of taxes in oil-importing countries, is an issue that is deliberately neglected in these countries. Yet, there are no efforts made by the media of oil producing countries or by OPEC to try to explain this to American and European consumers.

Many in western countries believe that they are the victims of oil producing countries and that the reasons behind the rise in prices is mainly due to the rise in prices per barrel. Such a lie has deceived many, and this accusation is promoted by oil-consuming countries. What further contributes to such claims is the failure of oil-producing countries to explain such a matter.

To support my argument, oil-producing countries do not receive one third of what American or European citizens pay to operate their cars. The main beneficiary in this situation is the major consuming countries that raise taxes to extreme levels causing the profits of chief oil companies to soar. Consumers” money is not put directly in the hands of the producers as many may believe, but rather the majority goes to the high taxes.

Political pressures exerted upon OPEC countries must be alleviated through a public relations campaign that is accompanied by figures to support it. Such a campaign must clarify the extent of high taxes that are imposed upon oil in consuming countries and should furthermore clarify the profits made by multinational oil companies and the actual profit quota allocated to oil-producing countries. If these countries participate in this campaign with partial shares, this will lead to a shift in Arab public opinion and will hence create pressure groups to defend consumers for the sake of decreasing taxes, not oil prices.

Any fair comparison between oil and the prices of any global commodity, will lead to one conclusion, that is, oil is the cheapest commodity whether crude or manufactured. It is enough that any European citizen would compare between the price of the car he drives, and the price of crude oil per barrel forty years ago to today”s prices; only then would he realize that there are a number of factors that he has missed.

Producers are the ones with fair cases, yet they refuse to exert any efforts in defending their case.