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Senators criticise high oil prices

Senators criticise high oil prices

Dec 28, 2014 - 17:22

KABULinfo-icon (Pajhwok): Some Meshrano Jirgainfo-icon members on Sunday complained against high prices of petroleum products and said the rates should be decreased in line with international market trends.

Senator Hidayatullah Rihaee from central Bamyan province told the upper house that oil prices had drastically fallen in all markets of the worldinfo-icon, but the products were sold for the same old prices in Afghanistaninfo-icon, registering no change. “No change is observed in fares of transport vehicles and airlines,” the lawmaker said.

Bismillah Afghanmal from southern Kandahar province said petroleum products were sold in Afghanistan for unjustified high rates against their plummeting prices in the international market.

“The price of oil has fallen in the whole world, but despite its low quality, the oil in Afghanistan is sold for a high price,” he said, calling for the inflation to be curtailed.

But Mohammaduddin Hamdard, who heads the Senate Economic Commission, said oil prices could not be reduced in Afghanistan because some mafia groups were involved in hoarding crude, thus contributing to high prices.

“We should support state-owned firms to enable them to maintain continued oil supply to the market and prevent inflation,” he suggested.

Senate Chairman Fazl Hadi Muslimyar said complaints had increased over the hike in prices of petroleum products because oil prices had decreased in the entire world, but their prices remained high in Afghanistan.

He tasked the Economic Commission with raising the matter with the Ministry of Commerce and the directorate concerned and reporting back to the house.

About a month back, a litre of petrol cost 62 afghanis and the same quantity of diesel 60 afs, but their prices have declined to 56 afs and 53 afs respectively.

Per barrel crude was priced on Sunday at $58 in Europe and Asia and $54 per barrel in the US.

International experts say the oil prices started sliding after 2009 and for the first time plummeted to the current level.

For much of the past decade, oil prices were high --- bouncing around $100 per barrel since 2010 --- because of soaring oil consumption in countries like China and conflicts in key oil nations like Libya. Oil production couldn't keep up with demand, so prices spiked.

By 2014, oil supply was much higher than demand.  High prices spurred companies in the US and Canada to start drilling for new crude.

At the same time, demand for oil in places like Europe, Asia, and the US began tapering off, thanks to weakening economies and new efficiency measures. On top of that, the conflict in Libya was slowly easing.

By late 2014, world oil supply was on track to rise much higher than actual demand and, in September, prices started falling sharply.



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