INDEPENDENT NEWS

OPEC Say: "It's Not Our Fault"

Published: Thu 14 Sep 2000 03:08 PM
OPEC: Why You Pay So Much For Gasoline And Other Oil Products
Whenever the prices of oil products such as gasoline (petrol), diesel or heating oil rise, OPEC is usually made the scapegoat by some sections of the media, politicians and the general public. “OPEC must raise output,” the cry goes up. This is based on the incorrect assumption that the Organization is responsible for high product prices. The point has been made many times before, but it is worth repeating: OPEC is NOT directly responsible for high gasoline or heating oil prices. The following analysis shows why.
Most consumers believe there is a directly proportional link between crude prices and the prices of products such as gasoline and heating oil. If product prices go up, then it must be because crude prices are going up. In other words, OPEC is perceived as being directly responsible for high gasoline or heating oil prices. Nothing could be further from the truth. Although there is a link between crude prices and product prices, it is neither direct nor proportional, and the main reason can be summed up in one word – TAXES. Of course, end users of petroleum products are not being told the truth.
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