RP, allies renew call for OPEC to raise oil production

The Philippines and its non-oil producing allies have renewed their call to members of the Organization of Petroleum Exporting Countries (OPEC) to immediately increase their oil production quota in a bid to stave off further hikes in oil prices.

Energy Secretary Vincent Perez Jr. reiterated an earlier call for increased oil production made at the recently-concluded conference of energy ministers held in Amsterdam. During the gab, Perez rapped OPEC countries for "junking the price band mechanism that OPEC itself helped establish to stabilize world oil prices."

Perez aired the call anew "in view of the disappointing response of OPEC members to our earlier call." He said some 120 days have passed since the band has been breached. He added that "the breach is causing so much unpredictability in the global oil market."

"These adverse developments in the oil market are not only hurting oil-importing countries like the Philippines but are also negatively affecting the world economy," Perez pointed out.

Perez asked OPEC to "follow the lead taken by Saudi Arabia which has given some positive indication that it might increase its production output soonest." He said the Saudi move "is giving the global market a breather from the unfortunate sequence of events in the oil price arena".

Perez also warned that the "apparent price squeeze-play is forcing non-oil producing countries to map out moves that will reduce our vulnerability to the volatile nature of oil pricing practices." In the Amsterdam meet, the Philippines led an informal caucus of non-oil producing countries including Japan, China, South Korea and India which discussed possible cooperation to mitigate the impact of current high oil prices.

Perez said the caucus agreed to meet again to formalize the cooperation.

President Arroyo earlier directed Perez "to use economic diplomacy to help cushion the impact of rising oil prices and to help oil producing countries to understand that a volatile oil market does not benefit any economy, whether that of the First World or of developing nations.