Iran: President Dismisses Call to Increase Oil Production
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Friday, 27 June 2008 |
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Iranian President Mahmoud Ahmadinejad dismissed calls
for oil producers to ramp up production in response to high prices,
saying the market was oversaturated with more crude than it was
consuming.
'I feel that oil prices are going up artificially. There is a game
going on behind it,' said Ahmadinejad in an interview with state
television focused on his controversial handling of the economy. 'The market is now oversaturated and oil is being pumped beyond
consumption. Consumption growth is less than production,' he said.
Iran, the number two producer in OPEC after the oil cartel's kingpin
Saudi Arabia, has responded much more coolly than the kingdom to calls
for producers to hike production in response to record prices.
Saudi Arabia's King Abdullah condemned oil 'speculators' at a
summit of leaders that debated the spiralling price of crude, which has
doubled over the past year. The king also announced Saudi output had risen to 9.7 million barrels
per day from 9.45 million barrels earlier, amid growing calls from
consumer nations for the feverish rise in crude prices to be brought
under more control.
Tehran has always insisted that the oil price is not being driven by
fundamentals and has been caused by factors such as the rapid
devaluation of the dollar.
The Iranian President, Mr Ahmadinejad said that if Europeans were so
worried about high petrol pump prices they should allow Iran to set up
its own petrol stations on the continent which would not charge the
usual hefty taxes. 'Now the European countries are earning more in taxes than the oil's
real price. If the Europeans allow us we are willing to set up gas
stations there and sell gas at lower prices,' he said.
Ahmadinejad has been criticised by Iranian economists for provoking
inflation rates of almost 25 percent with high spending instead of
saving the treasury windfalls from the high price of oil.
Economic issues will be crucial when the controversial president, as
expected, seeks re-election in summer 2009.
He said part of the government's reform of the economy would include
the gradual dismantling of subsidies, which the government pays to keep
basic goods such as bread and petrol at ultra-low prices. 'We hope to start with some areas in the second half of the year. We
have plans for all subsidies,' he said, without elaborating.
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