Venezuelan oil minister says poor refining capacity drives up oil prices

Venezuelan Minister of Energy and Petroleum Rafael Ramirez said Friday the high world oil prices are related to the refining bottlenecks, not supply.

The Organization of Petroleum Exporting Countries (OPEC) "can not do anything more" to bring down oil prices, Ramirez told reporters at a government event in Caracas.

OPEC oil ministers agreed in Vienna earlier on Tuesday to pump an additional 2 million barrels a day, nearly all of its spare capacity, for a three-month period beginning Oct. 1, while leaving its official output limit unchanged at 28 million barrels a day.

"The problem is not related to supply, it's related to the problem of refining capacity," Ramirez said.

Four Venezuelan refineries in the United States cut down their capacities because of Hurricane Rita and another one stopped productivity earlier as a result of Hurricane Katrina, the minister said.

He said 18 US refineries have been influenced by the hurricanes which caused shortage of fuel supply.

As to refining bottlenecks, Ramirez said no new refinery has been built in the past 25 years because of low profit of the oil industry and lack of investment.

He estimated that the world may need at least three years to ease the status quo of insufficient refining capacities, adding that all countries should shoulder their responsibilities.

"The times of low oil prices have ended and the current high oil prices will linger," the minister said.

Venezuela is the world's fifth largest oil exporter, a founding member of OPEC and a major fuel supplier to the United States.

Source: Xinhua