O.P.E.C.: Rise within reason

Press, 20 December 1978, Page 8

O.P.E.C.: Rise within reason

NZPA-Reuter Abu Dhabi

The world’s oil-export-ing countries yesterday seemed surprised at the international outrage which greeted their decision to raise 1979 oil prices by 14.5 per cent in quarterly stages.

“They should be happy they are getting a gradual rise,” said a senior Algerian delegate as he prepared to leave for home after a twoday Organisation of Petroleum Exporting Countries meeting which ended on Sunday.

“Our only alternative i would have been to raise ; prices immediately by a imuch larger percentage,” he added. The O.P.E.C. Oil Ministers decided to end their two-year freeze on the price of oil with a 5 per cent increase on January 1, followed by lesser rises on April 1, July 1, and October 1. When compounded, the increase will total 14.5 per cent over the year, though O.P.E.C. stressed that averaged through the year at a

steady purchaisng rate the increase would be 10 per cent. A standard barrel of O.P.E.C. oil will, by October ], cost $U514.54 compared with the present rate of 5U512.70. The O.P.E.C. decision has been hailed in Abu Dhabi as an act of moderation which proved the organisation’s sense of responsibility. Most industrialised States have criticised it, though, as being likely to thwart efforts to check inflation -and currency fluctations. In Washington, the White House called on O.P.E.C. to abandon the planned increases.

O.P.E.C.'s new secretarygeneral (Mr Rene Ortiz, of Ecuador) said criticism of the price decision was unjustified and showed lack of appreciation for the self-con-trol shown by the 13 O.P.E.C. States. “The oil-price rise was part of measures to correct the world economic situation,” he told the official Emirates News Agency before heading home.