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Tax Imposition Responsible For Fuel Price Hike -OPEC
The Organisation of Petroleum Exporting Countries, OPEC, has blamed tax imposition by major oil-consuming countries, not oil prices as the primary driver of fuel costs.
Secretary General of the organization, Haitham Al Ghais disclosed this in a recent statement.
His comments are coming as Nigeria experienced several petrol pump price hikes last year.
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The latest was on Monday when the Nigerian National Petroleum Company Limited announced an additional pump price hike in its retail outlets between N950 per liter and N1,019.22.
Speaking on the factors responsible for fuel price hikes, Al Ghais explained that the prices paid by consumers at the pump were determined by various factors, including the price of crude oil, refining, transportation, and marketing costs, oil company margins, and taxes.
According to Al Ghais, revenues generated from oil sales are often reinvested by oil-producing countries into the oil sector.
He stated that OPEC member countries reinvested a substantial portion of their revenue into exploration, production, and transportation projects.
On the other hand, the OPEC boss noted that consuming countries’ governments received significant revenue from taxes imposed on petroleum products.
In 2023, the Organisation of Economic Co-operation and Development’s average share of total tax on the final retail price increased year-on-year and amounted to approximately 44 percent.
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“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
“It is a sovereign right for countries and governments to develop their taxation systems, but when there is talk of concerns about the effect of high pump prices on the disposable income of populations, it is important to remember how much of this is from taxes flowing to finance ministries around the world”, he said.
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