antiguasun.caribbeanads.com 03/05/2003

Antiguans & Barbudans may soon be paying more at the pumps for gasoline. This was disclosed in a press release issued by the Prime Ministers office stating that the government had been forced to review the controlled Pricing Structure for fuel.

The release states that the government has set a fixed pump price of $6.85 up to the point where the market price reaches $2.60. Increases above this point would be passed on to the pump.

This means that the price at the pump would adjust upwards from $6.85 in line with market prices as translated through the price build up.

The old controlled Pricing Structure will be replaced with a new Flexible Pricing Policy that will reduce the Government’s input in the price of the gasoline allowing for the market force to determine the price at the pumps.

This move by the government, according to a source from the private sector, will adversely affect the cost of transportation. This may cause bus and taxi fares to be increased. Additionally, the source suggested that the government’s timing in making this announcement might be linked to the fact that oil prices will remain high due to the pending US/Iraq war.

However, the government views the move from a Controlled Pricing Structure to a Flexible Pricing Policy as significant to meeting its obligations and maintaining a stable economy.

The release further stated that a review of current fuel prices within the OECS shows that Antigua & Barbuda’s pricing for gasoline in particular ($6.8506) is below all other islands except St. Kitts/Nevis. These countries are also reviewing their fixed pricing policy in view of the current market prices.

The threat of war in Iraq and the current unstable conditions in Venezuela have forced fuel prices upwards around the world and oil markets anticipate that an attack on Iraq may lead to broader disruption around the Middle East, which supplies about two-fifths of globally traded crude.

Presently, oil prices are on average almost 60 per cent higher than they were a year ago.

Since 1980 Antigua & Barbuda has adopted a Controlled Pricing Structure, absorbing the cost in the rise of fuel and accepting gains in the lowering in cost, which over time balances out.

The Controlled Pricing Structure also ensured that the price at the pump was kept stable by variation in the Consumption Tax. This has been achieved through an agreed price build up structure between the monopoly supplier, the West Indies Oil Company Ltd., (WIOC) and the government.

All the elements of the pricing structure are fixed except for product price and Consumption Tax.

The Controlled Pricing Policy used by the government over the years meant that whenever there was an increase in product price on the market, the government experienced falling Consumption Tax yield.

This is the case currently, hence, in the long run the price of fuel at the pump remains relatively stable.

The present market trend in oil prices with the Controlled Pricing Policy in place will produce a significant loss in revenue from Consumption Tax from the importation of fuel and poses a considerable threat to the government’s ability to service its financial obligations.

The Flexible Pricing Structure will become effective upon the arrival of the next shipment of fuel ordered by the West Indies Oil Company Ltd.

The SUN spoke to several Service Station operators, last night, who were not aware of this new development.

sg.biz.yahoo.com Wednesday March 5, 11:37 PM

CARACAS -(Dow Jones)- Venezuela's state-owned oil monopoly Petroleos de Venezuela SA has almost fully brought back on line 500,000 barrels per day of crude production as storage tanks are being emptied and exports from the Jose port in eastern Venezuela are returning to normal, a loading manager said Wednesday.

"We don't have the problems we had last week, exports at our port are getting back to normal," loading manager Ruben Rodriguez said. Rodriguez said about three million barrels of crude were loaded at the Jose port Tuesday.

Select from the most reliable agencies  Last Friday, PdVSA had to shut in 500,000 b/d as storage tanks were filled and exports had to be slowed down. Luis Marin, PdVSA manager for the east, said Friday it would take the company three to four days to get back to normal.

Friday's drop coincided with the latest report of ex-PdVSA staff early Friday that production dropped by about the same amount to 1.13 million b/d from 1.58 million b/d a day earlier. The government maintained Thursday production levels stood at 2.08 million b/d.

The company was hit by a strike that lasted two months and severely affected oil production and exports. The government has fired more than 15,000 employees that participated in the strike.

Earlier this week, the company lifted the force majeure in the eastern region after major shipping agencies and oil companies certified loading conditions at the port.

The company is struggling to reach or go beyond the 2 million b/d production level, analysts have said. After focusing on easy oil fields that don't require much added pressure to get the oil flowing, PdVSA faces difficulties as mature oil fields are more labor and capital intensive and take more time to pump oil.

Experts have said they doubt PdVSA will reach 2.5 million b/d any time soon due to a lack of financial and human resources.

By Fred Pals, Dow Jones Newswires; 58212-5641339; fred.palsdowjones.com;

www.barbadosadvocate.com Web Posted - Wed Mar 05 2003 By Shawn Cumberbatch

BARBADOS has received a passing grade from the United States for its efforts to arrest illegal drug activity. Concern remains, however, that the island continues to be “a transit country and hub” for major producers of the illegal substances.

In its annual report card on illicit drug control worldwide, the International Narcotics Control Strategy Report 2003, the US lauded Government and other members of civil society for their efforts to control illegal drugs.

The Americans were also happy with joint efforts between themselves and authorities here, noting the governments of Barbados and the US had “brought into force three important agreements that will facilitate counter-narcotics cooperation”.

They were referring to a maritime agreement with overflight authority, an extradition treaty and a mutual legal assistance treaty.

US officials were also happy that Attorney-General Mia Mottley had publicly committed support to the Commissioner of Police Grantley Watson’s intention to “root out suspicious officers in the uniformed services, individuals who had been corrupted by narcotics traffickers and other criminal actors”.

Barbados was also lauded for its penal system that “provides alternative sentencing options beyond prison and fines”, and the fact Government planned to “develop a drug court that will specialise in providing non custodial sentences for drug offenders if appropriate”.

Another plus, thought the US, was the Proceeds of Crime Act which provides for the confiscation of property shown to have been derived or obtained through illegal means like drugs and money laundering.

Additionally, Barbados’ passing grade included its decision to establish a National Commission on Law and Order and the introduction of wire tapping legislation.

“The Government of Barbados’ National Council on Substance Abuse (NCSA) and the Attorney General’s office endeavoured with some success, to link law enforcement and demand reduction organisations in the framing and execution of the national plan,” the narcotics report noted.

It emphasised, though, that Government alone could not receive the praise since a number of Non Governmental Organisations (NGOs) had continued to play important roles. The US singled out the National Committee for the Prevention of Alcoholism and Drug Dependency (NCPADD) as one such NGO which was “very active and effective”.

All of this notwithstanding, the Americans said more work still needed to be done since Barbados was “a transit country and hub for cocaine and marijuana products, and less frequently, heroin and designer drugs, entering by sea and by air”.

The report said these drugs came from a host of nations including Colombia, Venezuela, Trinidad and Tobago, and Guyana.

“These drugs often enter Barbados in container vessels, while smaller vessels also bring in marijuana from St. Vincent and the Grenadines. Container freight forwarders and cruise lines are also reported to transport cocaine via Barbados,” the report claimed.

It said most cocaine shipments transiting Barbados were destined for North America and Europe.

www.msnbc.com

LONDON, March 5 — World oil prices rose on Wednesday on concerns that weekly U.S. government data due out later in the day would show further tightening of heating oil supplies as Washington built up troops for war on Iraq.        BROKERS SAID another bombing in the Philippines injected fresh uncertainty into the market along with news that Russian business people were leaving Iraq.        International benchmark Brent crude oil rose 36 cents to $33.45 per barrel, while U.S. crude futures gained 34 cents to $37.23.        “Although there is no direct link with the Philippines and oil, people are taking the bombings as an overall rise in terror tensions and an area of concern,” said analyst Lawrence Eagles at brokers GNI-Man in London.        “News that Russian families are pulling out of Iraq has also raised expectations of a step closer to war. But the U.S. data will dominate today,” he said.        Police said a home-made bomb exploded in a southern Philippine city on Wednesday, a day after a bomb attack killed 21 people at an airport to the east. Military officials blamed Tuesday’s attack on the Muslim separatist group the Moro Islamic Liberation Front, but it denied involvement.        U.S. crude has swung in a wide range of more than $4.50 over the last week since touching a 12-year high of $39.99 on Feb. 27, and is still 20 percent above where it started the year.        The prospect of a war in oil exporter Iraq comes at a time when crude stocks in the United States are hovering at their lowest levels since the mid-1970s.        Heating oil shortages in the northeastern United States have also raised fears of a supply crunch in the world’s top consumer.        The U.S. government will release later on Wednesday its weekly stocks report, and analysts expect crude supplies to rise while winter heating oil stocks fall.        On top of a crippling oil strike in Venezuela, which normally supplies 13 percent of U.S. imports, traders fear war in Iraq may disrupt exports from other countries in the Middle East, which account for 40 percent of world exports.         OPEC REASSURES        OPEC exporters have said they can cover any shortfall if an attack on Iraq disrupts its exports of roughly two million barrels per day. But traders and analysts say that most members of the Organisation of the Petroleum Exporting Countries are already pumping at full tilt and have little spare capacity outside the world’s top producer Saudi Arabia.        “We’re looking for crude to move above $40 when the attack is launched on Iraq. Even if OPEC does increase production we still see supplies remaining tight,” said Tetsu Emori, chief strategist at Mitsui Bussan Futures in Tokyo.        The United States ordered 60,000 more troops into the Gulf region on Tuesday in its preparations for a military strike on Iraq, which it says is not in full compliance with U.N. demands to disarm weapons of mass destruction.        The United States and Britain have already amassed a 250,000-strong force in the region.        U.S. Secretary of State Colin Powell said Washington was gaining support for a United Nations resolution backing war, but opponents France, Russia and Germany met in Paris to coordinate their opposition.        Some 150 members of Russia’s business community in Iraq were flying out of the country on Wednesday, the Interfax news agency quoted a Russian diplomat in Baghdad as saying.        U.S. preparations hit a snag at the weekend when Turkey’s parliament voted against the deployment of U.S. troops on its soil, which would have given access to northern Iraq.        Turkey’s powerful armed forces backed a tentative government move to submit a fresh motion to parliament allowing U.S. troops into the country.        © 2003 Reuters Limited. All rights reserved. Republication or redistribution of Reuters content is expressly prohibited without the prior written consent of Reuters.

www.heraldsun.news.com.au By KAREN COLLIER, consumer reporter 06mar03

VICTORIAN drivers are filling petrol tax tanks to the tune of $2.4 billion a year. Motorists using unleaded, lead replacement or premium fuel are paying almost $2 billion in excise and at least $400 million in GST, figures prepared for the Herald Sun reveal.

The tax-grab details, based on industry sales and government revenue data, were released amid calls for the Federal Government to ease the pain of drivers paying record high prices.

Peak unleaded petrol costs have bolted past $1 a litre in recent weeks as increasing oil and wholesale petrol costs flow through to the bowser.

The RACV has warned sustained high prices would damage the economy. It wants the Government to cut excise if there is no relief soon.

Fuel excise and GST swallow almost half the cost of every litre of petrol sold. In Victoria, on a litre of petrol costing $1, the excise was fixed at 37.7c. GST grabbed 9.09c.

Victorian drivers use 5.2 billion litres of petrol in a typical year. This is about one quarter of the Australian market.

Nervousness over a looming war with Iraq and a strike in Venezuela have added 10c a litre to pump prices since the start of the year.

Unleaded fuel costs at Melbourne service stations were yesterday 94.5c to 105.9c. The RACV said the average was 96.9c.

Motoring bodies say rising oil prices pump more GST into government coffers and increased the tax take from a resource rent tax levied on oil producers.

RACV government relations manager David Cumming said motorists were being treated as cash cows and were victims of war jitters.

"The Government can clearly afford to give tax relief if petrol prices do not start falling," Mr Cumming said.

The RACV said if prices kept rising, the Government would reap a tax windfall of up to $750 million a year nationwide.