By Santhosh V Perumal
DOHA: The governments of the UK, France and Italy pocket more than 50% from a litre of gasoline, which confirms Opec’s opinion that rising crude oil prices contribute little to motorists’ pain at the petrol pumps in Europe.
The UK’s tax on a litre of oil was 55% in 2007, while France and Italy ate up 53% each, Germany (49%), Japan (38%), Canada (30%) and the US (26%), Opec said in its 2007 report: ‘Who gets what from a litre of oil in the G7’.
It said the British Government received around 1.7 times more from taxation than the Opec got from the sale of its oil and the country also had the highest industry margins among the G7.
Finding that the estimated average annual G7 oil taxes were $460bn in 2002-06 against estimated average annual Opec revenue of $410bn, it said “thus, it is clear that the real burden on the consumer is taxation in the consuming countries.”
“If gasoline were not so heavily taxed in countries such as France, Germany, Italy, Japan and the UK, it would cost only a fraction of the current price,” said Opec.
Opec, which had earlier last month left its output steady despite calls from consuming countries for more oil to halt the record rally, endorsed the view that the market was well-supplied, with current commercial oil stocks standing above their five-year average.
It had said with concern that the current price environment did not reflect market fundamentals, as crude oil prices were being strongly influenced by the weakness in dollar, rising inflation and significant flow of funds into the commodities market.
The Opec study said the estimated total tax revenues of G7 amounted to $2.31trn during 2002-06 compared with $2.05trn of estimated total Opec oil revenue during the same period.
While the $2.31trn in oil taxation by the G7 was pure profit, it was not the case with the Opec nations, since they have to meet the cost of exploration, production and transportation from their $2.05trn income.
On the European taxation regime on petroleum products, Qatar Deputy Premier and Energy Minister HE Abdullah bin Hamad al-Attiyah had recently said: “It is easy money and they (Europe) are making more money than oil producers without putting in a single dollar.”
“There are still many misconceptions surrounding crude oil prices and the prices of products made from oil, such as gasoline,” Opec said.
There were wide regional variations in product prices, and that these are not due to differences in crude prices, but to widely varying levels of taxation in the consuming nations of the G7, it said.
These can range from relatively modest taxes (although by no means insignificant) in the US and Canada to very high levels in many European countries, the oil producers body said.
Among the G7, Italy had the lowest industry margins (after factoring in transport, insurance, refining and other costs), followed by Germany, the US, Canada, Japan and France.
Besides the tax structure, the low refining capacities and speculation were also driving up the oil prices, which remained above $100 a barrel for most part since the beginning of this year.
A top official of a petroleum company of India, which is now eyeing permanent membership in the US-based International Energy Agency, said 30-40% of the current oil price was due to speculation.
Though al-Attiyah did not quantify on speculators’ role, he said they had gone strong enough.
Opec president and Algerian Energy and Mines Minister Chakib Khelil had last month said petroleum prices could range between $80 and $110 per barrel for the rest of this year.