By Hugh Carnegy and Lionel Barber in Davos [FT] Published: January 28 2001 17:45GMT | Last Updated: January 28 2001 17:48GMT Tensions between oil producing countries and European governments over high taxes on petroleum products in Europe were sharply in evidence at the World Economic Forum despite the recent fall in crude prices from decade highs. Senior ministers from Organisation of Petroleum Exporting Countries (Opec) criticised European nations for putting the onus on Opec to raise production to tackle high prices, rather than cutting taxes that account for some 70 per cent of end-product prices in many western countries. Ibrahim Al-Naimi, Saudi Arabian oil minister, said "more and more taxes" had been piled on petroleum products in Europe in the name of environmental or conservation causes, often imposed when crude oil prices were low "to conceal their impact". Abdullah Al-Attiyah, energy minister of Qatar, complained that western consumer countries were happy to attribute periods of low oil prices to market forces, but demanded intervention by producers when prices were high. "It's very strange that someone has to find a scapegoat [when crude prices are high]. They should try to lower taxes which are very high," he said. But there was little sign that European governments were ready to respond. Instead European finance ministers at Davos continued to warn Opec that the oil cartel risked jeopardising growth in Europe if it pushed prices beyond a "reasonable" level of $20 to $25 a barrel. Opec's target range for prices is between $22 and $28 a barrel. Prices ended last week just above $25. Laurent Fabius, French finance minister, said a stable and reasonable oil price was a very important factor in influencing growth projections for 2001-2002. Hans Eichel, German finance minister, said that the dynamism of the euro-zone remained unbroken. But he warned of the danger of higher oil prices. "If oil prices stabilise at the level of the past few weeks, that would be a plus. I am sure that Opec is aware of its responsibilities," he said. Jens Stoltenberg, prime minister of Norway, backed a call by Mr Al-Naimi for dialogue between oil producer and consumer countries to address the issue of taxation. Norway has a foot in both camps as the world's second largest oil exporter which imposes some of the highest levels of taxation on petroleum products. But he said it was a "fact of life" that there was "massive intervention on the demand side as well as the supply side" in oil markets. "It will always be there and we will have to live with it." _______________________________________________ Crashlist website: http://website.lineone.net/~resource_base
