Opec calls for 'fair' oil prices

Strengthening ties: Mr Chavez and Saudi Crown Prince Abdullah

By David Willis in Caracas

Venezuela's President Hugo Chavez has opened a summit of Opec leaders in Caracas with a call for "stable and fair" oil prices.

Mr Chavez said that for too long the industrialised world had grown rich by exploiting the resources of developing nations.

Olusegun Obasanjo said prices were a matter of life and death

Both the International Monetary Fund and G7 group of leading industrialised nations have called for measures to reduce the price of oil, which currently stands at a 10-year high.

But the 11 Opec members seem more concerned about strengthening the organisation and obtaining what they see as a fair price from consuming nations.

It is only the second time the organisation, which controls three-quarters of the world's proven oil reserves, has met at head-of-state level since it was formed in Venezuela 40 years ago.

Dependent on oil

In the run-up to this summit, Opec leaders have had plenty to say about the need to stabilise the price of oil, but very little about reducing it.

Poorer members like Nigeria are dependent on oil revenue to fund the country's development.

"It is a matter of life and death to us," the country's President Olusegun Obasanjo told reporters before the start of the summit.

But wild price fluctuations make economic planning difficult - hence the need for a stable price for a barrel of crude.

National reserves

Opec members say government taxes are to blame for the protests against high prices that swept across Europe.

A senior Venezuelan official said his government earned less from supplying oil than the British Government did from taxing it.

This summit is more about strengthening the ties between Opec members and debating their problems than it is about dealing with price problems confronting the West.

The concerns are not confined to Europe. Last week, America announced plans to release 30 million barrels of oil from its national reserves in an attempt to bring prices below $30 a barrel.

If Western nations are looking to this summit for concrete measures to bring down the price of crude, it seems they may be disappointed.