OPEC rejects price band for crude oil

30 June 2008

Mumbai: The Organisation of Petroleum Exporting Countries (OPEC) has rejected any price band to control crude prices and instead predicted that global oil prices may touch $170 a barrel before the end of the year.

Political pressure on Iran and the depreciation of the US dollar had caused a surge in oil prices, said Chakib Khelil, OPEC president and Algeria's oil minister.

Khelil said the oil producing nations would not go back to a price band, as is being suggested by some countries, as there would never be an agreement on pricing.

"Producing and consuming nations never agree on any price. You remember we talked about 15 dollars and they were saying 13 dollars. We talked about 22 dollars and they were saying $18. Then we put a price band of $22-30, but they never agreed with the price band.

Crude prices have more than doubled in a year and is ruling around $143 a barrel currently. This has pushed prices at the pump in Australia to more than $1.70 a litre for premium unleaded petrol.

Khelil's comments come as the world's biggest crude producers and consumers gather in Madrid to discuss the crisis over rising fuel prices.