Wednesday, 03 December 2008
updated 1 minute ago
08:48 UAE time

YOUR DIRECTORY /

Refinery 'shortage' behind high oil price

by This email address is being protected from spam bots, you need Javascript enabled to view it on Tuesday, 17 June 2008

REFINING SHORTAGE: High oil prices are due to a shortage of refining capacity in industrialised nations, the UAE's oil minister has said. (Getty Images)

High oil prices are due to a shortage of refining capacity in industrialised nations, UAE Oil Minister Mohammed Al-Hamli said in remarks published on Tuesday.

"There are not enough refineries to meet growing demand," Al-Hamli told UAE daily Gulf News.

"A shortage of refineries is one of the main reasons behind the increasing prices as a result of the policies adopted by industrialised nations not to invest in new refineries due to environmental concerns, while the sector needs substantial new investments," he said.

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OPEC has consistently said that fundamentals are not to blame and that high oil prices are due to factors beyond its control such as US dollar weakness, speculation and international politics as well as a lack of refining capacity.

But concerns over globally rising prices have prompted Saudi Arabia to host a meeting of producers and consumers on June 22 to discuss rising oil.

Reports that Saudi Arabia plans to boost output initially helped ease prices but the effect was offset by US dollar weakness, propelling oil to a record high of almost $140 a barrel on Monday.

The UAE is one of the few members of OPEC with the spare capacity available to boost output, along with Saudi Arabia.

In Abu Dhabi to meet Al-Hamli on Monday, British Energy Minister Malcolm Wicks told Reuters that the UAE had not made any promise to boost output. (Reuters)

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