Posted on 04/15/2008 3:38:55 PM PDT by jsh3180
CARACAS, April 15 (Reuters) - Venezuela expects income of $9 billion a year through a new oil law obliging companies to give "windfall earnings" to the leftist government when world prices are above $70 a barrel, a minister said on Tuesday.
President Hugo Chavez, who has for years squeezed more revenue from oil companies operating in the OPEC nation and nationalized all foreign-run oil fields, wants the funds to be spent immediately on social programs in this election year.
The government will take in about 92 cents for every extra dollar when world prices are above $70 a barrel and then 97 cents when they are above $100 a barrel, his oil minister, Rafael Ramirez told reporters.
"Through the concept of this tax, there's going to be income around $9 billion. That's $770 million a month and an average of $150-$200 million a week. That's why, for the executive, it is urgent to create this law," Ramirez said after explaining the bill to Congress.
The bill is expected to become law within days.
World oil prices hit a record above $113 a barrel on Tuesday.
Chavez's new move against oil companies is part of a worldwide trend where oil-producing nations have sought to extract more revenue from foreign companies who are benefiting from high prices.
Still, oil sector analysts and industry officials have said they fear Venezuela's law is so tough it could inhibit investment in a country with some of the largest oil reserves outside the Middle East. (Reporting by Enrique Andres Pretel; Writing by Saul Hudson; Editing by Frank Jack Daniel and Marguerita Choy)
At least until people stop buying the stuff from you, Hugie.
I hear that the people there on pay $.12 a gallon for gas. He best get the money someplace or even his people will be up in arms.
But they can’t get a quart of milk!
As Zimbabwe goes, so goes Venezuela ...
Sounds like the ideas in Hillary and B.Husein O’s.playbook are being put to the test.
That $9 Billion dollars will cost Venezuela somewhere... my guess is higher productivity costs when less and less companies are willing to spend to improve infrastructures... so go ahead Hugo... show the world exactly why socialism and communism fails over and over again...
Incentives for the oil companies to seek under hundred dollar pricing per barrel, since $117 means they make an extra 51 cents. Then again, a hundred dollars a barrel, they make $2.10.
It took four people to report, write and edit that amazingly short article?
While it is obviously irrelevant since the rationale is disingenious, still, how did Chavez and Co. come up with $70 as the breaking point? There is of course zero incentive now for Chavez and Co. to assist in any way to lower oil prices. By creating this windfall law they are making residents (and more so, cronies) dependent on the law's income which in turn creates a disincentive for oil companies to invest which lowers output which....brings us back to point 1.
Naomi Cambell, Sean Penn and the rest of the far left syncophants are just as to blame as their idol of socialism, Hugo Chavez.
If we had a CIA worthy of one hundredth the abuse the Left heaps on it, Chavez would have been dead for a decade.
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