Fed: Australia to petition OPEC countries on oil prices

AAP General News (Australia)
08-25-2000
Fed: Australia to petition OPEC countries on oil prices

By Shane Wright

CANBERRA, Aug 25 AAP - Australia will petition OPEC companies with concerns about spiralling
world oil prices.

Foreign Affairs Minister Alexander Downer tonight directed ambassadors in OPEC countries
such as Iran, Saudi Arabia, Venezuela and Indonesia to make known Australia's concerns
about oil production.

Ambassadors will ask OPEC countries to lift oil production in a move to avoid price volatility.

He also said the issue of rising oil prices will be brought up at the next Asia Pacific
Economic Cooperation (APEC) meeting.

Mr Downer said the climbing prices could threaten world economic activity.

"The current situation has already contributed to higher global interest rates," he
said in a statement.

"If these pressures continue, they will seriously dampen the growth prospects for the
world economy, including OPEC countries.

"Australia is concerned that oil output constraints, which have led to these high oil
prices, are distorting energy markets and pose a serious threat to the global economy."

Mr Downer's efforts follow continuing political pressure for the government over petrol
prices which have now cleared $1 a litre in many parts of Australia.

Backbench MPs, motorist organisations, the Opposition and some states are demanding
the government freeze next February's excise increase which is expected to add about two
cents a litre to fuel prices.

Prime Minister John Howard again warned cutting petrol excise would put pressure on
interest rates.

"If you decide to cut the excise level and make it different from what you planned
for at the time of the budget, it means you are reducing the budget surplus," Mr Howard
said.

"If you reduce the budget surplus you are providing another reason, other things pointing
in that direction, to exert upward pressure on interest rates and I am not willing to
do that.

Labor backbencher Senator Sue West said an increase in diesel prices of 34 cents a
litre in recent months had wiped out the government's diesel fuel rebate scheme.

She said the rebate was set at 24 cents a litre when diesel was selling at 66 cents a litre.

AAP sw/gmw/mo

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