www.heraldsun.news.com.au By KAREN COLLIER and FLEUR ANDERSON 04mar03

DRIVERS hurting from soaring petrol prices have united to plead for fuel tax cuts.

Victoria's peak motoring group, the RACV, claims rocketing fuel costs could pump up to $750 million a year extra into Federal Government coffers.

Peak unleaded petrol prices have crashed through the $1 mark nationwide as higher crude oil costs triggered by war jitters and a strike in Venezuela flow through at the bowser.

RACV government relations spokesman David Cumming said constantly high fuel prices could grab up to $250 million extra a year in GST, and up to $500 million more from a resource rent tax levied on oil producers.

But Treasurer Peter Costello last night denied the Government would cash in on drivers' pain.

Mr Costello said petrol tax revenue remained in line with forecasts and that the Government may actually get less money from motorists' pockets.

The RACV said that in Victoria for every litre of petrol costing $1, the Government reaped 46.79c. This included excise at a fixed 37.7c and GST at 9.09c.

The motoring group plans to approach Prime Minister John Howard to cut excise by 10c a litre if petrol costs do not ease within a fortnight.

Business banking officer Paula Bouboukis, of Caroline Springs, joined the call for fuel tax relief to be considered.

Ms Bouboukis started catching a train to work a fortnight ago instead of driving because of higher petrol prices.

"Every extra dollar to fill up the car counts when you are a single parent and paying off a mortgage," she said.

But Mr Costello insisted the Government was not in line for a tax windfall.

"The Government has frozen excise -- this does not go up with CPI or inflation," he told the Herald Sun last night.

"The GST goes to the states. The Commonwealth does not get extra GST."

Mr Costello rejected Opposition figures predicting the Government would reap at least $600 million more from the GST and petroleum resource rent tax this financial year.

Mr Cumming said drivers were the victims of war jitters and warned continued high prices could not be tolerated.

"Country towns are already beginning to hurt from people having less left over in the budget each week," he said. "We are paying an unfair war premium for a conflict that may or may not happen.

"The Government cannot do anything about the rising crude oil price, but it can certainly do something about tax."

www.modbee.com

Here's a scenario guaranteed to send chills down your spine: Germany has decided the oil fields of Venezuela are too precious a world resource to allow the corrupt and evil government there to ruin, and the government is oppressing the people, and the economic instability of the regime there threatens to disturb the world oil market, which makes it a national security risk for Deutschland.

So it announces the German army is going to invade Venezuela next month and put things right, liberate the oppressed people of that small country, and install the German army general as "temporary" governor of the country to safeguard the natural resources and restore world order, as well as promote peace in the general South America-Central America region.

How would that idea play in the United States? About as well as President Bush's newly announced plan for Mideast peace is playing right now in the world: We invade Iraq, "free" the people by installing an American general as temporary ruler, and "protect" the Iraqi oil fields. Now that none of the other "arguments" our government is using seems to have hit the spot, Bush has decided his real goal in Iraq is to bring the two sides together in the Mideast.

Yes, war will really do that. And I want the German army in Venezuela.

DORRIE E. WHITLOCK Modesto

Posted on Modesto Bee: March 3, 2003 @ 04:50:08 AM PST

sg.biz.yahoo.com Monday March 3, 5:19 PM

With Turkey's parliament rejecting a proposal to admit U.S. troops into the country as part of a possible war with Iraq, and Iraq destroying some of its missiles, the possibility of a war in the near term has been reduced, traders said.

The Straits Times index added 5.35 points, or 0.4%, to 1279.20, off an intraday high of 1291.75.

Gainers outnumbered losers 129 to 82, while 356 stocks were unchanged or untraded. Volume fell to 228.6 million shares from 246 million shares Friday.

CapitaLand was among the big gainers as Singapore's biggest property developer by assets said it expects its overseas operations to contribute to over 50% of earnings this year, from 45% last year - with China underpinning that rise.

CapitaLand shares ended up 2.9%, or S$0.03, at S$1.06 (US$1=S$1.7372).

Neptune Orient Line shares gained 1.7%, or S$0.015, to S$0.905, after its U.S.-based oil transporting unit, American Eagle Tankers, said it has received a US$220-million contract to transport fuel from Venezuela to Asia.

www.smh.com.au March 4 2003

OPEC, supplier of a third of the world's oil, may struggle to replace output from Iraq should that nation's exports be halted by a war because most members are pumping near their limit, analysts said.

Oil prices have surged 63 per cent in the past year and last week approached $US40, the highest since the 1990-91 Gulf War, after US inventories fell to among the lowest level in three decades. Should an attack disrupt Iraqi supply, oil importers will have to tap emergency reserves to prevent soaring prices, analysts said.

"The problem is OPEC is getting close to the limit of what it can do," said Julian Lee, a senior analyst at the Centre for Global Energy Studies in London, a think tank founded by former Saudi oil minister Sheikh Zaki Yamani. "Prices aren't going to come down much until US inventories start to rise."

Analysts put OPEC's spare capacity at about 2 million barrels a day, equal to 2.6 per cent of world output and less than Iraq's daily output of 2.5 million barrels. Two million barrels is enough to meet daily demand in France, the world's fifth-largest economy.

OPEC members, except Iraq, agree to restrain oil supply to boost prices. They increased quotas twice this year to fill a shortage caused by a strike in Venezuela and after a colder-than-normal winter boosted demand for heating fuel.

In 2000 OPEC neared the limits of its spare capacity after the group raised production quotas and US prices surged to more than $US37 in September of that year. The present situation is similar, analysts said.

"If war starts with Iraq, there will have to be a significant release from the strategic reserves in the US to avoid an economic catastrophe," said Adam Sieminski, an oil strategist at Deutsche Bank.

The US and other industrialised countries hold inventories to alleviate supply shortages, reserves built to avert a repeat of the shortages seen during the 1973 Arab oil embargo. US Energy Secretary Spencer Abraham has said the nation may use its 600 million-barrel strategic reserve to offset any "severe" disruption in supply.

A recovery in OPEC's oil capacity depends in part on Venezuela. Production in the South American country has risen to 2 million barrels a day, the Government said. That is still two-thirds of output levels last November.

No consensus has emerged from OPEC on what steps to take on March 11, when oil ministers meet in Vienna to set policy for the second quarter. At that time, oil demand normally slows because of the northern hemisphere spring.

"We acknowledge that there's a shortage in the US," said OPEC President Abdullah bin Hamad al-Attiyah, who is also the oil minister for Qatar. "There's a lot of oil in the middle of the sea heading to the Gulf coast and we are still not sure yet whether that will be sufficient."

OPEC Secretary-General Alvaro Silva said current supply was equal to demand, while oil officials from Kuwait and Qatar said last week the group may raise output. Other officials have said output quotas will be lifted entirely should Iraq's exports be cut off.

JP Morgan Chase estimates OPEC could muster another 2 million barrels a day, largely from Saudi Arabia and the United Arab Emirates.

"OPEC is irrelevant at the moment," said Lawrence Eagles, an analyst at GNI-Man Financial in Belfast, Northern Ireland. "Now, there's only one country that counts, Saudi Arabia."

Saudi Arabia may already be pumping 9 million barrels a day, Mr Eagles and other analysts said. The kingdom says it can raise output to 10.5 million barrels a day within 90 days.

The International Energy Agency is likely to tap inventories in the event of a war on Iraq, the group's executive director said. The IEA coordinates the use of government oil reserves in the US and 25 industrialised nations.

A stockpile release is "likely but not certain" should Iraq be attacked, the agency's executive director, Claude Mandil, said. He was "confident" OPEC would be first to take steps by raising output.

Bloomberg

business-times.asia1.com.sg By VEN SREENIVASAN

SINGAPORE - Keppel Corp was the star performer in an otherwise lethargic market today, as investors warily watched the latest twists and turns in the unfolding Iraq drama.

The stock of the marine conglomerate shot to $4.43 before closing a net 14 cents lower at $4.28 ¡Âú its highest level since mid-November 2002 ¡Âú as players focused on companies that promise stability, growth, value and yield amid increasing geopolitical and economic uncertainty.

Keppel Corp's stock has gained more than 10 per cent in the past three sessions.

The Straits Times Index kicked off this week on a bright note, hitting 1,291.75 before late profit-taking pared it to a close of 1,279.2 ¡Âú a net gain of 5.35 points.

But despite the positive top-line indicator, the broad market was less than effervescent.

Volume was modest, with about 333 million Singapore dollar-denominated units worth some $229 million changing hands as gainers led losers 129-82 and 348 counters closed unchanged or weren't traded.

Venture Corp, which once more has delivered in terms of earnings, was the top gainer, rising 50 cents to $13.90. Last week, the contract manufacturer delighted investors by posting a stronger-than-expected 35 jump in net earnings to $181 million on a 65 per cent rise in revenue to $2.4 billion.

Not surprisingly, Venture's proven ability to do well despite tough conditions has prompted a slew of ""out-perform'' calls on its stock, with fair value ranging from $16 to $18.

Other notable blue chip gainers today included Singapore Airlines, which added 15 cents to $9.60, and Creative Technology, which was up 20 cents to $11.20.

The stock of Neptune Orient Lines eked out a 1.5-cent gain to 90.5 cents after the company announced that it has won a seven-year contract worth US$220 million to transport fuel from Venezuela to Singapore. But the deal will not help NOL's earnings in the current financial year.

Among small caps, Citiraya was in the limelight.

The stock of the electronic components recycling specialist topped the actives list with almost 22 million units changing hands as it gained 3.5 cents to 54.5 cents on speculation that the strong gold price will boost the firm's bottom line. Gold is a by-product of Citiraya's recycling activity.

Surface Mount Technology (SMT) was also actively traded, following a visit by analysts to its China operation. The stock edged up a cent to 52.5 cents as some 3.7 million units changed hands.

Research house Kim Eng sounded an upbeat note on SMT after visiting the company's Dongguan plant. In an on-line report, the local broker said SMT is poised for strong growth: ""All factories remain fully utilised ¡Âú even the four newly added lines over the past six months,'' Kim Eng said. ""It appears that the group's production ramp is on track to make another record year.''

Going forward, geopolitical concerns are likely to continue to dictate sentiment and the direction of equity markets.

Indeed, rises in Japan, Hong Kong, Taiwan and Sydney today were largely seen as a reaction to a perceived fall in the risk of war in Iraq.

Baghdad's decision to dismantle its Al-samoud missiles, Turkey's refusal to host US ground troops for an invasion, calls by some Arab nations for Saddam Hussein to step down and strident opposition to US-led military action by France and other United Nations Security Council members are seen as key factors weighing against an attack on Iraq for the time being.

But all this could change come Friday, when UN Chief Weapons Inspector Hans Blix reports to the Security Council.

In the meantime, the market is expected to gyrate between hope and fear.

Analysts expect the ST index to remain largely range-bound between resistance at 1,280-1,290 and support at 1,260-1,270 as the focus remains largely on short-term situational plays.