NI academics gives mixed views on issue of oil and gas cartels and retail prices

NI academics have given mixed views about whether oil and gas rich countries could be making decisions which are exacerbating the unprecedented spike in fuel prices hitting the Province.

Friday, 22nd October 2021, 8:53 am
Updated Friday, 22nd October 2021, 9:12 am

The Consumer Council said that rises in international oil and gas prices mean that by December a typical consumer could see their combined energy and travel costs rise by nearly £1,000 year-on-year.

When the US government was asked this week what it was doing about OPEC –the world’s 13 main oil-producing countries – failing to meet its output targets for September, a White House spokeswoman responded that it is “continuing to press ... member countries of OPEC to address the supply issue” and that it will “continue to use every lever at our disposal”.

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Gas prices are rising sharply

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Asked if OPEC was deliberately restricting supplies to make up for losses during global pandemic lockdowns, Dr Tony Klein of the QUB Management School, who has researched OPEC extensively, did not see that as an issue.

“I do not see any signs for a deliberate and joint effort to cut production within OPEC to increase oil prices beyond any reasonable values,” he said.

Regarding natural gas, he said stock levels are “extremely low” compared to previous years and as such, skyrocketing prices are “a logical consequence”.

However, he also said he was not qualified to say if Russia and OPEC were engaging in cartel-like behaviour. 

“I do not wish to comment further as I am not an expert in this field,” he said, adding: “The current energy crisis is caused by an unprecedented shock in demand, not only in the EU but world-wide, in a post-Covid recovery.”

Ulster University senior economist Dr Esmond Birnie said there have been genuine supply problems – but added that some gas and oil rich countries are “making the most” of the situation.

“There have been genuine supply problems such as fires and shutdowns in certain gas fields,” he said. “It is not surprising that governments sitting on economies which are extremely heavily dependent on fossil fuels – notably Putin’s Russia but also Saudi – are making the most of the current market situation.”

Brenda Kearns of Age NI encouraged older people to contact their Advice Line on freephone 0808 808 7575 or email [email protected] to check if they are receiving the available welfare payments and allowances. “This includes the winter fuel payment, which is available to those over state pension age and can be worth up to £300 depending on your age and circumstances.” she said. She urged pensioners to check www.nidirect.gov.uk/articles/who-qualifies-winter-fuel-payment or call for advice. The £100 high street spend local voucher can be used before November 30 to purchase fuel, she added.

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