Saudi Arabia to help ease oil price hike

Saudi Arabia, the world’s leading oil exporter, gave assurances to the Philippines and other developing countries that it was doing all it could to stabilize world oil prices so as not to hamper development efforts of struggling economies.

President Arroyo said yesterday that Saudi Minister of Petroleum and Mineral Resources Ali Ibrahim Bin Al-Naimi personally informed her of the Kingdom’s word during the oil minister’s visit to the Palace.

In a welcome speech to Al-Naimi and his delegation, the President expressed the country’s deep concern about maintaining the price of affordable energy for all Filipinos.

"The Minister told me that the King of the Kingdom of Saudi Arabia has given instructions to ensure that developing countries, like the Philippines, do not suffer due to high oil prices," Mrs. Arroyo said.

"Saudi Arabia is doing everything within its power to keep the price of oil down, and I thank him for that," she said.

The Saudi oil minister told reporters that the kingdom would like to see petroleum prices drop.

The president of the Organization of Petroleum Exporting Countries has started consultations for a possible 500,000 barrel-a-day increase in OPEC output, on top of the 500,000 barrel-a-day hike agreed to last week, Al-Naimi said in a press conference in Malacañang.

He described the world oil prices as "high," yet said there should be no reason for this since there is no lack of supply.

He also sought to dispel perceptions in the oil market that there would be a shortage in the immediate future.

"There’s nothing I can do about people’s perceptions that there’s going to be a shortage of supply and that’s the reason the price is on the rise," the minister said. "I hope, in due time, we will be convincing."

Al-Naimi also said Saudi Arabia’s output of 9.5 million barrels a day could be increased to 11 million "if we have a customer."

In the longer term, the kingdom is determined to expand output capacity to 12.5 million barrels a day, Al-Naimi said.

"We would be very happy to sell 11 million (barrels a day) today rather than 9.5 (million barrels a day)," he said. "The fact that the price is on the increase has many different contributors to it. Certainly there is no lack of supply."

Light, sweet crude for April delivery fell 13 cents in electronic trading Monday to $56.59 per barrel on the New York Mercantile Exchange. The benchmark commodity surged 32 cents to close at $56.72 per barrel Friday.

Al-Naimi paid a call to Mrs. Arroyo where both discussed the issue of rising oil prices and investments in the industry.

"Taking control or our energy future means taking control of our economic future," the President said. "Energy independence is a key pillar of our efforts to stamp out poverty and diminish the impact of rising prices."

One of the government’s fiscal reforms will be the privatization of the power sector.

"We cannot hope to build a strong energy sector if it is built on a foundation of quicksand, which is precisely what will happen if we do not get the VAT (value-added tax bill passed) and privatization revenues soon," she said.

The President said the privatization of the debt-ridden National Power Corp. would be accomplished through the sale of its generation assets and transmission company concession.

This will be done, she said, in order to "not only reduce a drain on public sector revenues, but to also produce revenue that can be used to invest in infrastructure" that would result in the economy growing and creating new jobs for many Filipinos.

The government’s goal is to make the country more self-reliant in terms of energy. — With Elisabeth Schmidt-Hieber