1976 Opec members split over prices

Saudi Arabia and the United Arab Emirates have rejected an increase in the price of oil of 15% suggested by the Organisation of Petroleum Exporting Countries (Opec) and have chosen instead to impose a lower price rise.

The two countries are to limit their increases to 5 per cent while the other 11 countries in Opec will initially increase their prices by 10% in January and a further 5% in July.

This will take the cost of Opec oil to $13.30 (£8.42) per 42-gallon barrel by July 1977.

Explaining their decision the Saudi Arabian oil minister said: “We have no aims. We decided the price of our own oil and they decided their own.”

However, it is also hoped America will take the move into account when dealing with the Arab-Israeli conflict.

A spokesman from the United Arab Emirate said holding the price of oil sold to Western countries would be beneficial because “we need their cooperation in searching for a peaceful settlement”.

And they warned countries the 15% rise would damage the world economy.

In response to Opec’s decision to raise prices outgoing US President Gerald Ford said the members who agreed had not considered the “destructive consequences of their actions.”

“World prosperity requires a common commitment to the well-being of all peoples and a special sensitivity to the plight of the world’s poorest societies.

“The decision of the Opec majority clearly does not meet such standards of international responsibility” he added.

Jimmy Carter, currently waiting for his January inauguration as President of the United States, praised the decision of the breakaway members but insisted “no commitments” had been made on the handling of the Arab-Israeli conflict.

Courtesy BBC News

In context

The Organisation of Petroleum Exporting Countries (Opec) was formed in September 1960.

There were originally five member states. At one time that rose to 13 but there are currently 11 members.

They include Iran, Iraq, Venezuela, Algeria, Kuwait, Libya, Nigeria, Qatar, Saudi Arabia, Indonesia and the United Arab Emirates.

Opec aims to stabilise the price of oil on the international market.

In doing so it hopes to ensure a regular supply of petrol, a fair deal for buyers and sellers of petrol and to secure a steady income for its member states.