Advertisements

OPEC: Fuel Pump Prices Rise Due to High Taxes, Not Crude Oil Rates

by Krystal

Haitham Al Ghais, the Secretary General of the Organisation of Petroleum Exporting Countries (OPEC), has stated that rising fuel pump prices are primarily caused by taxes imposed by various governments, rather than fluctuations in crude oil prices.

In a recent article, Al Ghais emphasized the essential role of crude oil and its products in the global economy. He explained that oil provides consumers with petrol, diesel, and other transportation fuels, while also supporting the production of plastics, pharmaceuticals, and medical supplies.

Advertisements

Al Ghais highlighted the importance of oil revenues for producing countries, stating they are crucial for their economies and the well-being of their populations. He pointed out a common misconception: many believe that every increase in oil prices automatically raises fuel costs and boosts oil producers’ profits at the expense of consumers. This view can create conflict between consumers and producers, ignoring the fact that both groups have legitimate interests in the energy sector.

Advertisements

He noted that the price consumers pay at the pump is influenced by various factors, including crude oil prices, refining costs, transportation, marketing expenses, oil company profits, and taxes. Al Ghais argued that understanding these components provides valuable insights into fuel pricing. He stressed that while oil revenues do rise, much of the earnings come from taxes collected by major oil-consuming countries.

Advertisements

For instance, he highlighted that wealthier economies earn significantly more from the retail sales of petroleum products than OPEC member countries earn from selling oil. From 2019 to 2023, the Organisation for Economic Co-operation and Development (OECD) countries made, on average, about $1.915 trillion more per year from petroleum retail sales compared to the oil revenues of OPEC nations. A considerable portion of the final retail price of petroleum products is due to taxation.

Advertisements

In 2023, the average tax share of the final retail price in OECD countries increased to approximately 44%, with some nations exceeding this figure. In several European countries, taxes accounted for more than 50% of the final retail price throughout the year.

You Might Be Interested In

Advertisements
Advertisements

You may also like

oftrb logo

Oftrb.com is a comprehensive energy portal, the main columns include crude oil prices, energy categories, EIA, OPEC, crude oil news, basic knowledge of crude oil, etc.

【Contact us: [email protected]

© 2023 Copyright oftrb.com – Crude Oil Market Quotes, Price Chart live & News [[email protected]]