OPEC blames taxes for high petrol prices

The world's leading oil producing nations say a cut in production announced this weekend, should not lead to higher petrol prices unless governments use it as an excuse to increase their revenue.

Some analysts are suggesting countries that import oil, including Australia, face paying higher prices following the million barrel a day cut by the Organisation of the Petroleum Exporting Countries (OPEC).

OPEC president Chakib Khelil claims the organisation is only stabilising oil supplies and any increase in petrol prices should be blamed on government tax policies.

"For every dollar OPEC countries receive, industrialised countries receive $4, revenues of these countries last year were $1,000 billion," he said.

"Before they show a finger at OPEC they should probably reduce taxes."


Production cut

Members of the OPEC oil producing cartel meeting in the Austrian capital, Vienna, have agreed to cut output by 4 per cent, or one million barrels a day.

The cut, which was widely expected, is aimed at keeping prices from falling in the face of a seasonal weakness in demand and an overall decline in global economic growth.

OPEC says the cut will take effect from April 1.

The cartel's members pump almost 40 per cent of the world's oil, and their decision will affect retail prices for petrol and other refined products in importing countries.

OPEC oil ministers hope the markets will use the weekend to consider the move and not react too negatively when trading begins again on Monday.

Analysts say there is a risk that cutting production could tip the industrialised world into recession thereby creating even less demand for oil.

abc.net.au