www.guardian.co.uk Owain Johnson in Caracas Friday February 21, 2003 The Guardian

Venezuela's opposition has accused President Hugo Chavez of beginning a witch-hunt against his critics, after a leading opposition figure was arrested in a dramatic raid and another was forced into hiding.

Henry Ramos Allup, the president of the opposition party Democratic Action, said he had reliable information that the government was planning to arrest a further 25 key opponents.

Mr Ramos Allup said the list included politicians, businesspeople, union leaders, representatives of striking oil workers and media bosses.

The claim came after the arrest of Carlos Fernandez, the leader of business association Fedecamaras, in a swoop on a Caracas restaurant by masked, armed police shortly after midnight on Wednesday.

Mr Fernandez was one of the leaders of a crippling two-month general strike which forced Venezuela to suspend crucial oil exports and severely damaged its fragile economy.

Witnesses said the heavily armed men did not show any identification or an arrest warrant. The business leader tried to escape in his car, but was quickly caught and taken to police headquarters. Diners who tried to prevent the arrest were driven off by the police, who fired into the air.

Mr Chavez spoke yesterday about Mr Fernandez's arrest. He told a trade forum that "I went to bed with a smile. "One of the coup plotters was arrested last night. It was about time, and see how the others are running to hide." A second leader of the general strike, Carlos Ortega, the president of the Confederation of Venezuelan Workers (CTV), was in hiding last night with a warrant out for his arrest.

He said he did not trust Venezuelan justice and warned that the government wanted "to kidnap me and eliminate me".

A pro-government deputy, Luis Velasquez, later confirmed that 100 people could expect to be questioned about their role in promoting the strike. "This shouldn't be a source of alarm," Mr Velasquez said. "They simply have to answer to the courts."

The government had requested the public prosecutor's office to charge Mr Fernandez and Mr Ortega with rebellion, treason, instigation to commit criminal acts, conspiracy and sabotage. Mr Fernandez's arrest took place just days after the discovery of the bodies of three dissident military soldiers and a young woman, who had disappeared over the weekend.

The four victims, who had been shot dead, were found bound and gagged. Their bodies showed injuries consistent with torture.

The three men were part of a group of rebel officers who have declared themselves in rebellion against president Chavez, and their families immediately condemned their murder as politically inspired.

The Venezuelan opposition was due to hold crisis talks late last night to discuss its response to these latest developments in the country's long-running political crisis. Last April dissident military officers launched a short-lived coup against the government.

Mr Chavez's opponents accuse him of authoritarianism and of seeking to install Cuban-style socialism in Venezuela. The president rejects these allegations and accuses his critics of seeking to prevent him from carrying out much-needed social reforms.

A senior opposition figure, Andres Velasquez, the leader of the Radical Cause party, has urged his colleagues to call a further one-day strike in protest at the arrest of Mr Fernandez.

Mr Velasquez said the arrest had "torn into pieces" the accord reached on Tuesday by the government and opposition to reduce tension in the oil-rich country.

The agreement was the first tangible sign of progress in three months of negotiations between the two sides under the auspices of the Organisation of American States, and Mr Velasquez said the opposition leader's arrest was "an insult" to the OAS secretary-general, Cesar Gaviria, who has been chairing the negotiations and left Caracas only hours earlier.

In a communique from Barcelona, Mr Gaviria urged the Venezuelan authorities to ensure that "judicial decisions are taken independently, impartially, in strict accordance with the law and with the rights enshrined in the constitution".

news.ft.com By Carola Hoyos Published: February 21 2003 4:00 | Last Updated: February 21 2003 4:00

As President George W. Bush presses ahead with his plans to topple Saddam Hussein, the oil world is preparing for what many foresee as the dramatic effects of any return by Iraq to the international market.

"The re-emergence of Iraq will be of historic significance, because of the scale of the resources and because of the realignment it may portend among the major oil exporters," says Daniel Yergin, chairman of Cambridge Energy Research Associates (Cera), a consulting group.

Fadhil Chalabi, a former Iraqi oil minister and a second cousin of the Iraqi opposition leader Ahmed Chalabi, goes further. He predicts that Iraq could within five years rival the dominant position of Saudi Arabia, which controls 260bn barrels of crude oil reserves, more than 20 per cent of the world's total and the majority of its spare capacity.

Iraqi oil officials suspect the country's 112.5bn barrels of proven crude oil reserves - the world's second largest after Saudi Arabia - would top 300bn barrels once Iraq's entire acreage was mapped.

And unlike the Caspian region - the "great new frontier" of the 1990s - Iraq's crude oil is easier to access and to export. Iraq has the added advantage of being able to transport much of its output through the Mediterranean via a pipeline to Turkey - a flexibility other Middle East producers lack.

The need for more reliable sources of oil has become acutely apparent, to Washington in particular, in the past two months as political turmoil in Venezuela halted 15 per cent of the US's usual import stream.

Neo-conservatives have lobbied for the US to reduce its dependence on Saudi Arabia, since it emerged that 15 of the 19 hijackers involved in the September 11 terrorist attacks in 2001 hailed from the kingdom.

The US relies on the kingdom for one sixth of its oil imports and depends on it as the only producer that, with a usual spare capacity of up to 3m b/d, could boost its exports significantly in the event of a world crude oil shortage.

That dependence could change drastically if Iraq were finally able - after decades of wars and sanctions have left many oilfields undiscovered and much of its infrastructure destroyed - to fulfil its true potential.

"Iraq needs to be seen as a part of the larger emerging contest between Russia and the Caspian on one side and the Middle East on the other side as to who will add more capacity to meet the growing world's demand," says Mr Yergin, author of The Prize: The Epic Quest for Oil, Money and Power.

After the collapse of the Soviet Union, international oil companies flocked to the Caspian region, tempted by possible total reserves of more than 200bn barrels and potential exports of more than 3m b/d by 2010.

Meanwhile, Russia began to resurrect the production it lost throughout the 1980s and 1990s, pushing it to more than 7m b/d within eight years and steadily eating away at Saudi Arabia's share of the world market. More recently, presidents Putin and Bush announced a strategic partnership between the two countries and BP this month signed a $6.8bn (€6.3bn, £4.3bn) deal to create Russia's third-largest energy company.

Nevertheless, bottlenecks from Russia's pipelines to its ports and an inhospitable business environment make the country a long-term bet rather than a short-term possibility in terms of investment and strategic oil supply, in the eyes of many oil executives.

Whether the same must be said for Iraq depends on many "unknowable factors", as one oil company director put it. Would the country's transition be a smooth one, or would Iraq disintegrate into political turmoil? Would Saddam Hussein, who last month appointed Sameer Aziz al-Naji, a ruthless Ba'athist commander, as his new oil minister, destroy Iraq's oilfields as he retreated?

Vera De Ladoucette, of Cera, warns it could take Iraq two to three years to restart production after a damaging war.

But Mr Chalabi takes an optimistic view, dividing Iraq's investment needs into two phases: recovery and development. The first phase, which would probably last one to two years, would see Halliburton, Schlumberger and other service companies helping Iraq restore its production from the current 2.5m b/d average to 3.5m b/d, a volume it last saw in July 1990, just before it invaded Kuwait.

The second, the development phase, would include the world's biggest oil companies, among them BP, Total, ChevronTexaco, Exxon/Mobil, Shell, Lukoil and Eni, vying for lucrative production sharing contracts with the new government.

Mr Chalabi estimates Iraq's production capacity could increase by another 4.5m barrels per day by 2008, eventually reaching 10m bpd and possibly surpassing Saudi Arabia and Russia to 12m. Others are far more pessimistic.

"This isn't going to happen overnight. It can't. We are going to have to be patient," says James Simpson, managing director for the Middle East and North Africa for ChevronTexaco.

Adam Sieminksi, analyst at Deutsche Bank, says a large increase would be theoretically possible, but he believes Iraq, unwilling to risk severely depressing world oil prices, would choose to move much more slowly. In a recent report he concluded: "In theory, new investment could add a mind-bending 4.7m b/d to Iraq's capacity. In reality, this looks more like a 20-year investment trend and extremely unlikely to come on stream over a short period of time."

Still, Iraq's desperate need for money to reconstruct an economy ravaged by sanctions would probably encourage deals, analysts say. Adding to the burden is the country's $140bn debt and the possibility that the US could demand that a new regime help pay for the cost of the war.

What type of oil policy Iraq would then follow is as unclear as who would run the country. Even if Iraq did not maintain a similar policy of voluntarily shutting in some of its production to act as aswing producer, an aggressive production growth policy could have huge ramifications for the future of Opec.

Since 1999 the cartel has managed to maintain high oil prices by reining in production - a delicate balancing act that could be destroyed if the group's members felt their market share was in jeopardy. That would undercut prices and ultimately also reduce Iraq's returns, but it would benefit consumers, as did the discoveries in the North Sea and Alaska that helped bring down prices from the lofty heights they reached after the Iranian revolution in 1979, when Americans queued for gasoline for the first time.

Rilwanu Lukman, who recently stepped down as Opec's president and is Nigeria's presidential energy adviser, says Opec must face the reality of Iraq's return: "Sooner or later they will come back." He adds: "You have to be reasonable. If we allow Iraq in, someone is going to have to give up."

That sacrifice will probably have to be made by Saudi Arabia, which has gained the most in extra market share from Iraq's absence. How much the kingdom will be willing to rein in production will ultimately decide the future of the oil market and perhaps of Opec itself.

news.independent.co.uk By Phil Gunson in Caracas 21 February 2003

A leader of the opposition movement against President Hugo Chavez in Venezuela was being held at the secret police headquarters in Caracas yesterday after his arrest at gunpoint late on Wednesday on charges of treason and criminal conspiracy.

Secret police (Disip) and military intelligence officers detained Carlos Fernandez, president of the leading business association, Fedecamaras, when he left a Caracas restaurant, the organisation's vice-president, Albis Munoz, said. Gunshots were fired into the air as he was hauled off.

"We demand that the government guarantee his safety," Ms Munoz said, adding that Mr Fernandez had been "practically kidnapped".

Mr Fernandez was one of three main leaders of the two-month-long strike against the government of President Chavez, which began on 2 December. Mr Chavez has accused leaders of the strike – which is continuing in the oil industry, the heart of the economy – of sabotage and of seeking to overthrow his government by force.

During his regular Sunday TV and radio programme, the President urged judges and public prosecutors to take action against organisers of the stoppage, referring to them as "coup plotters".

The opposition claims that Mr Chavez, who was twice elected with large majorities, is turning the country into a dictatorship, ruining its economy and violating the new, 1999 constitution.

The other two strike leaders – Carlos Ortega of the main trade union confederation, the CTV, and Juan Fernandez, a former oil industry executive – have been warned to turn themselves in or face arrest.

Mr Ortega went into hiding after describing the arrest of Mr Fernandez as a "terrorist act", according to his fellow CTV leader Manuel Cova.

Speaking to a Venezuelan radio station, Mr Cova said Mr Ortega was in hiding because, "we cannot allow the government to humiliate him ... as of now the rule of law does not exist in Venezuela, and neither the life of Carlos Fernandez nor that of Carlos Ortega can be guaranteed".

Government spokesmen were slow to comment yesterday, and the human rights ombudsman, German Mundarain, did not return calls. But the judge who claims to have issued the arrest warrant for Carlos Fernandez, Maikel Jose Moreno, listed charges against him. These include treason, rebellion and criminal conspiracy.

Tarek William Saab, a congressman and former human rights activist, said he understood from "unofficial" sources the charges against Mr Fernandez related to "sabotage carried out in the oil industry and calls for a tax strike [among] a series of alleged offences the country is aware of [which took place] between December and January."

According to spokesmen for Fedecamaras, the armed men who detained the business leader presented neither identification nor an arrest warrant.

They fired into the air to disperse a small crowd before taking Mr Fernandez to the headquarters of Disip, the secret police. Sonia Fernandez, the business leader's wife, said she was able to speak to him, that he was physically unharmed and was in talks with his lawyers yesterday.

Leaders of the opposition umbrella group, the Democratic Co-ordinator, were quick to condemn the arrest as arbitrary and illegal. They announced a 15-minute stoppage at midday and a protest march called for yesterday afternoon.

The arrest of Mr Fernandez was made only days after the torture and murder, in circumstances that have yet to be clarified, of three soldiers and a young woman involved in a four-month anti-government protest by military officers in a Caracas square.

The New York-based organisation Human Rights Watch has called on the government to run a full and impartial investigation of the murders and to protect a teenage witness who was also seriously injured.

The four victims were found in the suburbs of Caracas with hands tied and faces wrapped with tape. Darwin Arguello, Angel Salas and Felix Pinto and Zaida Peraza, 25, an opposition activist, had multiple bullet wounds and showed signs of torture, police forensic scientists said.

The killings coincided with the signing of an anti-violence accord between government and opposition after three months of talks chaired by Cesar Gaviria, secretary general of the Organisation of American States.

abcnews.go.com The Associated Press Feb. 20 —

The middle of winter feels more like the heart of summer at gas stations nationwide, as fuel prices surge past $2 a gallon in some places and motorists grumble about being gouged.

When a gallon of gas costs more than a cup of gourmet coffee around the July 4 holiday, drivers chalk it up to industry greed during the peak driving season. Now consumers are accusing oil companies of taking advantage of the prospect of war in Iraq an allegation the industry brushes aside as a conspiracy theory.

Gas station owners tell a more complicated story, explaining that today's high pump prices are partly the result of avarice, but not their own.

The average retail price of regular unleaded has risen 22 cents since the beginning of the year to $1.66 a gallon. Meanwhile, wholesale prices paid by marketers have increased only 14 cents.

While suppliers tack on costs for additives and transportation, the disparity is the source of ire for much of the public, and some consumers suspect oil companies are trying to cash in on market uncertainties.

"This is ridiculous," said 20-year-old Jose Quiles, a tanning salon manager in Dallas, who paid about $10 Thursday for a little more than 6 gallons of Exxon-branded gasoline.

Corina Alba, 22, sees some correlation between gas prices and the possibility of war in Iraq, but the Anaheim, Calif., resident doubts international affairs solely explain the situation.

"I think it's just an excuse to raise prices," Alba said.

Earlier in the week, Sen. Charles Schumer, D-N.Y., called on the Federal Trade Commission to launch an investigation of industry practices. "It appears as if price gouging is taking place across the country," Schumer said in a letter to FTC chairman Timothy Muris.

The American Automobile Association supports Schumer's request. The travel company said it is also concerned about why prices have gone up so much in such a short period of time, though a spokesman stopped short of using the term gouging.

"We feel that most of the increase has been due to fear and speculation, rather than any change in the supply or demand for crude oil or gasoline," said Jeff Sunstrom, a spokesman for AAA. Regardless of the reasons, Sunstrom worries that today's high prices could be a harbinger of even costlier fuel by the end of April.

"Watch out between April 15 and May 31," said Tom Kloza, director of Oil Price Information Service, a Lakewood, N.J., publisher of industry data. Kloza said the imports lost after Venezuela's oil workers went on strike in December have not been adequately replaced and that could be a problem when the weather heats up and demand rises.

Gas prices typically rise during spring, when refiners shift from winter- to summer-grade fuel. The switch to cleaner-burning gas requires shutting down equipment, scrubbing it clean and starting it up all over again a process that causes supplies to contract and prices to move higher even under the best conditions.

The impact of this switch has already been magnified by the possibility of a U.S.-led invasion of Iraq, analysts said.

Trucker Tommy Wimberly paid $280 to fill up his rig with 166 gallons of diesel in Camillia, Ga., or about a third more than a month ago. "I don't like the high prices, but I'm not angry," said Wimberly, 43, who expects prices to go even higher if the United States goes to war with Iraq.

"There's nothing I can do about it," he said.

As the public face of the industry, gas station owners are frustrated by accusations of profiteering, but they insist they're not the ones to blame. They say suppliers have been steadily upping their "rack" prices for weeks and that station owners are merely passing along the changes to customers without any benefit to their bottom lines.

"I realize that the price of a barrel of oil has gone up tremendously, but the way that rack prices have gone up for the last two weeks is just not right," said Richard Loeber, owner of a Hess station in Union Beach, N.J. About 40 percent of the retail cost of gasoline is attributed to the price of crude oil, which has risen 19 percent since the start of the year to $36.79 per barrel.

Loeber said Hess has raised the rack price by 16 cents a gallon in less than three weeks and that he has maintained his 8-cent-per-gallon margin all along.

Loeber and other retailers attribute the rapid increases to "zone pricing," a phenomenon in which suppliers value their product based upon the highest level a particular market will bear. For example, if their customers' rivals are getting a nickel more per gallon at the pump, they will set their rack price accordingly, even if the supplier's costs haven't gone up.

"People know they're getting gouged, but believe me, it's not from the dealers," Loeber said.

The National Association of Convenience Stores, which represents about 100,000 sellers of gasoline, says its members are especially unhappy about the high gas prices because they detract from sales of soda and chips where they make most of their money.

"Our members make more off a 12-ounce coffee than they do off a 12-gallon fill-up," said Jeff Lenard, the organization's spokesman.

For its part, the petroleum industry fends off critics at times like these by pointing to higher oil prices. The surge has mainly been attributed to traders' fears of supply disruptions in the event of a war in Iraq and the impact of the Venezuelan oil strike.

"The fundamental thing is that crude prices have gone up dramatically," said John Felmy, chief economist at the American Petroleum Institute.

www.newsday.com Feb 20, 2003 On the Web Weekly Gasoline Prices

Talk About: High Gas Prices Gas prices are nearing the $2 mark in the New York metro area. What are you doing to cope with the high prices? Who or what is to blame? What should we do about a national energy policy? Talk about it now.

The people voted for a bond to help fix the roads in New York. Gov. Cuomo came up with this bond and New Yorkers are still paying 10 cents per gallon to pay off the bond. Everyone forgot about this... Who knows if the bond will ever be paid off. Submitted by: Danism 1:45 PM EST, Feb 21, 2003

Its all about oil, money and war for oil and money for the Politicans & businessmen to fatten their wallets. Submitted by: ed 1:38 PM EST, Feb 21, 2003

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By Zubin Jevleh Staff Writer

February 21, 2003 Richard Huang may have to give up his first love: his car. The 21-year-old Valley Stream resident drives three times a week to Stony Brook University where he studies computer science.

But with higher gas prices, the 80-mile roundtrip journey has become less fulfilling.

"I love driving and listening to my music, but I can't keep paying this much if the prices go any higher,” said Huang, who shelled out $35 to fill his 1997 Lexus LS400 with mid-grade gas at an Amoco gas station in East Meadow Thursday.

With the threat of war against Iraq, low oil supplies, and an ongoing oil strike in Venezuela, gas prices have soared in recent weeks. At some local gas stations, prices for premium have topped $2 a gallon. According to the Long Island Gasoline Retailers Association, self-service regular grade gas has climbed three cents in the past week to average $1.76 on Long Island. (The average for premium is almost 20 cents higher.)

Instead of filling up their tanks, several drivers said they were setting a $20 or $30 limit on gas purchases now. Others are parking SUVs in favor of cars with better gas mileage.

Andrew Lawton, a construction contractor, said he had to reduce how often he drives his 2002 Ford Excursion.

"I was paying close to $60 to fill up, but now I've been taking out my other car more,” said Lawton of Levittown.

Consumers are not the only ones hurting. At the independent Emporium gas station in East Meadow, owner Sardar Liaqat said he had to cut one worker's hours to save money to pay his bills. "The same number of people are coming but they are buying less gas,” said Liaqat. In the past two months, he said, the amount of gallons he had sold had dropped by half.

Despite the wallet-wilting prices, "when compared with the early '80s, present prices are still significantly less,” said Bill Bush, spokesman for the American Petroleum Institute. Adjusted for inflation, the price per gallon for gas in 1981 was $2.70.

Still, Huang, who only works part time, said he had started to think about alternative means of transportation. "I had been fighting it, but I'm going to have to start taking the train,” he said.