OPEC v/s Opic - a Case for Formation of Organisation of Petroleum Importing Countries
39 Pages Posted: 21 Sep 2003
A hike in Oil Prices is inevitably followed by recession. Also the Oil prices are highly volatile. The smallest production cut by OPEC leads to massive increase in prices. Hence even if the Oil importing Countries reduce demand by small amount the prices should fall.
Oil importing countries should unite and form Organization of Petroleum Importing Countries (OPIC). The purpose of Organization of Petroleum Importing Countries would be to stabilize the Oil Prices in the region of 10$ a barrel by reducing the consumption of Oil.
OPIC will research and help nations reduce their energy intensity of GDP. Since Transportation consumes maximum amount of Oil with little substitutes, the target would be to reduce Oil consumption in Transport sector by promoting Public Transportation by taxing personal vehicles (cars etc) and gasoline appropriately reflecting their externalities. OPIC would promote substitution by Natural Gas wherever possible. OPIC would promote clean environment and meeting the environmental standards set in Rio De Janeiro and Kyoto. OPIC would promote military cooperation between Oil Importing Countries to ensure Energy Security by combating terrorism and conflicts in Middle East.
OPIC would use the savings from Oil - 300 billion dollars to 500 billion dollars to create a Global Poverty Fund, which would be used to promote food security, investments in health care and education, drinking water, sanitation and empowerment of women.
Keywords: OPEC, Oil prices, dollars, Oil, Poverty, Environment, Energy, Efficiency
JEL Classification: A1
Suggested Citation: Suggested Citation