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In a speech before the Asian-European Editors Forum in Bangkok last
Friday, Sebastian Paust, executive director of the Asian Development
Bank, quoted a World Bank report that 33 countries have been facing
political and social unrest due to “skyrocketing” oil and food
prices.
There were riots in 22 countries affected by the
energy crisis, according to Paust. The Philippines, for one, is
reeling from the increase in oil prices, causing the sale of rice
and other prime commodities at prohibitive costs.
No end to the rise in oil prices seems to be in
sight. Almost every day, the country’s oil companies announce an
increase in the cost of gasoline, causing new rounds of increases in
the price of consumer goods, utilities and services.
Economists say the price of gasoline is
determined by market forces. But the world’s oil price today has
broken all records. While the price hike has met the seemingly
insatiable appetite of the Organization of Petroleum Exporting
Countries (OPEC) for huge profits, it has disrupted the social and
economic life of many nations.
The oil cartel was organized initially by
Venezuela and four other nations around the Persian Gulf. Today, the
OPEC has 13 members—Algeria, Ecuador, Gabon, Indonesia, Iran,
Iraq, Kuwait, Libya, Nigeria, Qatar, Saudi Arabia, United Arab
Emirates and Venezuela. It has gone beyond its main goal to
counteract falling oil prices when it brought a four-fold increase
in the world price of the commodity in 1973 to 1974.
The continuing price increase has been causing a
chronic inflation that has worsened over the years, affecting many
nations around the world.
It was the United States that launched the
modern petroleum era with its discovery of a commercial well in
Pennsylvania in1859. During World War I, the US was producing
two-thirds of the world supply from domestic sources. With the war
straining its oil deposits, it became a net oil importer.
For three decades, through its five oil
companies, the US expanded its oil production to other parts of the
world. It was followed by Britain which first tapped Iran for its
own oil production. Together, the US and Britain were producing a
sufficient world supply to a point that the world oil price went
down to one dollar per barrel.
The drop in the price of oil drove Venezuela and
its four original partners to organize the OPEC. Together with its
eight new members, the OPEC began to control the price of oil,
especially with the expansion of demand arising from its replacement
of coal as the main source of energy in many countries.
During the Arab-Israeli war in 1973, the OPEC
cut back oil production and embargoed oil shipments to the US, a
close ally of Israel. Panic ensued in oil-consuming countries,
resulting in “wild bidding” for crude oil that encouraged the
cartel to raise prices.
Two other world events—the revolution that
ousted the shah of Iran and the Iran-Iraq war in 1980—caused
negligible crude oil production and drove prices up. Wild bidding
flourished again and at the end of 1980, the world oil price jumped
30 times what it was 10 years earlier.
The OPEC can peg the price of oil within
acceptable levels if it wills it. It should, in a show of
magnanimity, rationalize its pricing policy with a view to giving
each barrel of oil its fairest value for the benefit of all
oil-importing counties.
Filipino girl shines in NY
On June 6, a Manila-born 17-year-old Filipino
girl delivered her address as valedictorian of the graduating class
at Dominican Academy, a college prep school for girls, in New
York’s Upper East Side.
Maria Patricia Guillermo Baquiran, the only
child of Orland Baquiran and his lawyer wife, Eugenia, of Tuguegarao
City and Quezon City, will receive a gold medal, aside from the
President Bush’s Award for outstanding academic excellence and the
New York Governor’s Scholastic Achievement Award.
Patricia has earned numerous academic awards
throughout her high school in science, math, history, English and
Latin. She is a National Merit Commended Student and has always been
in the Principal’s QuarterlyHonor Roll through grades 9 to 12.
She has completed six college-level (advanced
placement) courses and achieved a perfect score in the math section.
She was a semi-finalist in the recently-concluded 2008 Fed Challenge
sponsored by the Federal Reserve Bank of New York.
As a member of the National Honors Society, she
served as peer tutor to many students. A frequent contributor to her
school newspaper, she served as student ambassador. In the fall, she
will attend Cornell University, a member of the Ivy League, where
she will pursue a business-pre-law course.
Welcome to Patricia and her family who arrived
in Manila last Friday for a vacation.
agr0324@yahoo.com
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