17 March 2005
The ABC of oil
The Green Party says it’s time for the Government to get real on rising oil prices.
This follows yesterday afternoon’s announcement by Saudi Arabian oil minister Ali al-Naimi that OPEC has lost control of
oil prices because they are already pumping as fast as they can. (Please see http://www.msnbc.msn.com/id/7190109/)
“Yesterday morning Reserve Bank Governor Alan Bollard was trying to soothe the Finance and Expenditure Select Committee
by saying that ‘oil prices will still settle back to US$30 a barrel’,” Green Co-Leader Rod Donald said.
“Last month, Finance Minister Michael Cullen stood by Treasury’s prediction that oil prices will fall to around US$35 a
barrel. Both positions totally lack credibility now that OPEC ministers have admitted that they can’t keep up with
demand.”
Crude oil for April delivery rose to US$56.46 a barrel yesterday, the highest price on the New York exchange since crude
oil futures trading began in March 1983, following OPEC’s admission.Meanwhile, at least one oil industry analyst is
saying that oil may rise to US$100 a barrel before demand slows.
“It’s time we listened to the Arabs and the analysts instead of Bollard and Cullen and faced up to a future of rising
fuel prices. The Government still has a small window of opportunity to reduce New Zealand’s dependence on oil before
price rises really start to hurt.
“Step One: acknowledge the problem is real and urgent.
“Step Two: act now. Vehicle fuel efficiency standards would result in needing half as much fuel as we use now to travel
the same distance.
“Step Three: invest in more public transport powered by renewables, more in rail for freight and passengers, and more in
walking and cycling.
“Step Four: encourage more local production and become less dependent on long-distance overseas trade for low-value
commodities.
“It is time for serious action rather than more talk,” Mr Donald said.
ENDS