Oil Bill Could Hit $1 Billion Because of Multinationals

September 16, 2005

THE National Oil Refinery (RECOPE) announced this week the country’s oil bill could reach $1 billion by the end of the year, up from $699 million in 2004 and $526 million in 2003, if international oil prices do not decrease.With consumption as it is, and the barrel cost at $60, the country will spend $954 million by December. However, West Texas Intermediate – a type of crude oil used as a benchmark price – could reach $70 a barrel, meaning 2005 spending could reach $1 billion. Oil was at $63.60 a barrel Tuesday.According to a RECOPE statement, prices have reached record levels for three reasons: limited refinery capacity on an international level; geopolitical problems, particularly tensions in Iraq; and climatic problems causing natural disasters such as hurricane Katrina, which destroyed oil installations (see separate story).OPEC (Organization of the Petroleum Exporting Countries) has cited multinationals and speculators for the high prices. Secretary General Adnan Shihab said speculation has resulted in an increase of 10-15%.“The market situation does not justify the prices,” he said in a statement released by RECOPE.Multinationals “abuse the situation to get exaggerated earnings, while they are not investing sufficiently in the refineries we urgently need,” Shihab continued. RECOPE President Litleton Bolton said the best way to reduce national oil spending is to reduce consumption.Last month, the government initiated various measures in an effort to reduce national oil consumption – restricting driving and restarting a train in San José.

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