Even in Saudi Arabia, the world's largest oil exporter, there were rumblings of political unrest as the government struggled to cover its debts by borrowing heavily from abroad. Now that the sudden tripling in their oil incomes has boosted their economies, producers complain they are being unfairly accused today of gouging consumers. The producers also believe it is hypocritical for the West to plead for the sanctity of the free market when some European countries impose taxes that amount to almost 80 percent of the gasoline price at the pump. That means for every five barrels of crude oil sold to Italy, for example, the Italian government pockets the income from four barrels. Now they want us to bear the burden and cost of environmental problems, even though coal, which is subsidized in some consuming countries, is much more polluting than oil.
Producers also worry about the the potential impact on demand of efforts to reduce global warming.
In treaty negotiations taking place in The Hague, more than 150 countries are seeking agreement on how to curtail pollutants, mainly from oil and other fossil fuels, that are contributing to an increase in the Earth's temperature. Because oil is being targeted as a key villain, Saudi Arabia and other producers are demanding compensation because, they argue, any cuts in fuel consumption will inflict lasting damage to their economies. The claim by many oil producers that they are economically vulnerable does not win much sympathy from consumer nations. The harshest criticism comes from developing nations such as Thailand, the Philippines and South Africa. Within the past year, those countries have struggled with soaring inflation and unemployment because their treasuries have been drained by high oil bills.