Petrol Price Hike-Blame It On Bill
New Zealand is reeling from savage petrol price hikes, but much of the blame for the price increases can be squarely placed at the feet of the Clinton administration. John Howard reports.
Oil ministers from the OPEC nations have told US national security advisors that the oil production cutbacks - and resulting price increases - are being implemented at the request of the Clinton administration on behalf of Russia, Indonesia, Mexico and Iran.
Russia, Mexico and Indonesia are now reported to be directing their increased oil profits towards paying back long overdue Western bank loans.
Part of the transcript of a recent CNN interview between Bernard Shaw, Vice President Al Gore and Senator Bill Bradley is revealing.
SHAW: Now, Sen. Bradley, for you, and Internet question from CNN.com: We sent our armed forces to the Persian Gulf in 1991 to return a country to its owners. Now we see higher gas prices. What will you do to ensure this does not happen again?
BRADLEY: In 1991, we did fight the Persian Gulf War. We won. And now the gas prices are very high - the highest they've been. I think the reason they're high now is because we more or less asked OPEC to raise oil prices in hopes of helping Russia to be able to sell its oil on the international market, make more foreign exchange and be able to develop its economy.
GORE: Secretary of Energy Bill Richardson has completed a tour of the Middle East and we have been in communication with the OPEC countries and frankly Kuwait, which was freed from Iraqi domination, has responded very positively. And if you've been reading the public signals from Saudi Arabia, they have too. But I think we can get much more done on this the less we talk about it in public.
According to a recent Washington Post article, US Energy Secretary Bill Richardson visited Saudi Arabia in February 1999 when prices were lowest.
"Former Saudi minister Sheik Ahmed Zaki Yamani told a Houston oil conference that Richardson had "saved the oil industry" during that visit, because his "intervention" had "persuaded" the Saudi's to change policy by raising prices," the Post article said.
" In a move seen as a reward to Russia for advocating an end to U.N. sanctions, Iraq issued new export allocations that heavily favoured Russian trading companies. Thus, Russia profits both from the rise in oil prices and from expanding Iraqi production," the article said.
The run-up in oil prices has had other effects. It made the Chechnya war affordable for Russia. But it is also likely to slow the Asian economy recovering from the 1997-8 crash.
The oil profits and war combination has also helped Russia buy the very expensive SS-27 Topol missile, despite having a crippled economy.
The largest Middle Eastern oil producers are also using increased income for weapons purchases. Several oil states have announced major weapons buys from the West, including a recent multi-billion-dollar purchase of Lockheed/Martin F-16 fighter jets. And Iran is also trading oil with China in exchange for missile technology.
In recent years, OPEC had flooded the market with oil, lowering prices worldwide.
But the lower prices, according to Denise Bode a commissioner on the Oklahoma Corporation Commission, were designed to discourage investors in global domestic oil production, thus maintaining a world monopoly for OPEC.
"In 1997, OPEC acted to consolidate the American market by sending much cheaper oil, dumping it at historically low prices. Domestic oil production has consequently moved from holding steady to a 5.4% decline. Despite higher oil prices there has been no increased US production," Bode said.
"It's very clear what OPEC should do if they want to retain control," said Donald Hodel, former secretary of energy during the Reagan administration.
"Periodically, they should announce they are going to produce excess volumes of crude oil. The announcement itself will scare away some capital investment from new production. If that doesn't work, they could over-produce, drive the price down dramatically, so that marginal wells around the world will be shut down and new investment will be curtailed."
In the oil, money and weapons cartel business the words of Patrick Henry need to be remembered:-
" The best of all business is politics. For a grant, a franchise, a tax exemption or loan, is better than the Kimberley or Comstock load; it requires no effort for its exploitation."
And as old oil magnate John D. Rockefeller once said "Competition is a sin."
And ain't that the bottom line of the cartels. Its not capitalism which is at fault - but cartel capitalism supported by political cronyism.