The Secretary General of the Organisation of Petroleum Exporting Countries, Haitham Al Ghais, has stated that taxes imposed by major oil-consuming nations are the main contributors to rising fuel costs, rather than the price of crude oil itself.
Al Ghais explained that consumer prices at the pump are influenced by several factors, including crude oil prices, refining and transportation costs, marketing expenses, oil company margins, and taxes.
He highlighted that oil-producing countries typically reinvest a significant portion of their revenues from oil sales back into the sector.
According to Al Ghais, OPEC member countries allocate substantial resources towards exploration, production, and transportation projects, emphasizing the importance of these investments for future supply stability.
Al Ghais stated that these reinvestments ensure a continuous supply of oil to meet global demand. He also pointed out that governments in consuming countries receive substantial revenue from taxes levied on petroleum products.
In 2023, the Organisation of Economic Co-operation and Development reported that the average share of total tax on the final retail price increased year-on-year, reaching approximately 44 percent.
In some European countries, taxes accounted for more than 50 percent of the final retail price, it was revealed.
According to Al Ghais, the United Kingdom’s Office for Budget Responsibility projected that fuel duties would generate £24.7 billion from 2023 to 2024.
This amount represents 2.2 percent of total receipts, equating to approximately £850 per household and 0.9 percent of national income.
“Therefore, for many consumers, taxation can be a more significant factor than the original price for crude, in feeling any pinch in their pocket at the pump,” he stated.
He explained that from 2019 to 2023, OECD economies earned approximately $1.915tn more per year from retail sales of petroleum products than OPEC countries made from oil revenues.
He noted that this significant revenue stream was largely due to taxation.
Al Ghais emphasised that oil-producing countries do not have the luxury of spending all their revenues on social, economic, and infrastructural development.
Instead, they must reinvest in the oil sector to secure current and future supplies.
