Haitham Al Ghais, Secretary General of the Organisation of Petroleum Exporting Countries (OPEC), has attributed the recent increase in fuel pump prices primarily to government taxes rather than crude oil prices. In a recent article, he emphasized the essential role of crude oil and its derivatives, which are crucial for transportation fuels, plastics, pharmaceuticals, and more.
Al Ghais argued that the prevailing narrative suggests that higher oil prices automatically benefit producers at the expense of consumers. He cautioned that this perspective can foster conflict between stakeholders in the energy sector, overlooking the fact that all parties have legitimate needs and concerns.
He clarified that the final price consumers pay at the pump is influenced by various factors, including crude oil prices, refining and transportation costs, oil company margins, and taxes. According to his analysis, a significant portion of revenue is generated by major oil-consuming nations through taxation rather than directly from oil sales.
From 2019 to 2023, OECD economies earned an average of approximately $1.915 trillion per year more from the retail sale of petroleum products than OPEC countries earned from oil revenues. Al Ghais noted that in 2023, the average tax share of total retail prices in OECD countries reached about 44%, with some nations exceeding 50%. He concluded that understanding these dynamics is crucial for comprehending the complexities of fuel pricing.
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