Oil-for-poor initiative floated

The world's largest oil exporter Saudi Arabia proposed on Sunday creating a $1 billion OPEC fund and offered $500 million in Saudi soft loans to help poor countries cope with high oil prices.

Speaking at the opening of a meeting of world oil consumers and producers, King Abdullah also urged the creation of what he described as an international energy-for-the poor initiative and called on the World Bank to arrange a meeting to discuss it.

"I call for the launch of an energy-for-the-poor initiative, the purpose of which is to enable developing countries to face the rising cost of energy," he said.

"I also call for the ministerial council of the OPEC fund for international development to meet and look into deciding a parallel programme that would be continuous in nature. I propose that this programme allocates $1 billion," he added

The Saudi king also suggested the creation of a task-force to follow up any decisions made at the Jeddah meeting and monitor the global oil market.

King Abdullah said Saudi Arabia was willing to provide oil supplies needed in future but said OPEC was being unfairly blamed for high prices spurred by speculation and taxes.

Riyadh summoned both producers and consumers, plus chief executives from big oil firms, to the meeting after an unprecedented day of trading on June 6, when oil prices surged by $11 a barrel to a new peak, the largest ever one-day rise.

The price of crude has more than doubled in a year to almost $140 a barrel, triggering protests from Brussels to Bangkok over rising fuel costs that threaten the world's economy.

King Abdullah also announced Saudi plans to provide soft loans to help poor nations deal with high oil prices but said cooperation between consumers and producers was the only way to address the effects of "rapid and unjustifiable" increases.

"I announce the allocation of $500 million for soft loans through the Saudi development fund to finance projects to help developing countries to acquire energy," he said.

"In this critical hour, the world community should rise to its responsibility and cooperation should be the cornerstone of any efforts..."

Saudi Arabia said in recent days it would raise output to 9.7 million barrels per day (bpd) in July, its highest rate in decades. King Abdullah confirmed the output.

"Although OPEC had left the market to decide the price of oil and was keen on meeting the increasing demand... fingers were pointed against OPEC alone," he said. (Reuters)

READERS' COMMENTS

MORE FROM ARABIANBUSINESS.COM