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Obama moves to end oil subsidies

19th March 2012

US president calls for an end to the USD 4bn state aid to support oil companies

End to US subsidies for oil?

US president Barack Obama has called to end the USD 4bn in annual subsidies to oil companies that are earning "historic profits". In the next few weeks Congress is expected to vote to end these subsidies, he said in his weekly public address on 17 March.

“At a time when big oil companies are making more money than ever before, we’re still giving them USD 4bn of your tax dollars in subsidies every year. Your member of Congress should be fighting for you. Not for big financial firms. Not for big oil companies,” the president told the US public. 

If the US is to ensure it does not remain “at the mercy” of gas price spikes every year, the answer is not to drill more, “not when we use more than 20 percent of the world’s oil, but still only have 2 per cent of the world’s known oil reserves,” said the president.

“Under my Administration, we’re producing more oil here at home than at any time in the last eight years, that’s a fact. We’ve quadrupled the number of operating oil rigs to a record high, that’s a fact. And we’ve opened millions of acres on land and offshore to develop more of our domestic resources,” he said.

“If we don’t develop other sources of energy, and the technology to use less energy, we’ll continue to be dependent on foreign countries for our energy needs,” he continued.

If the US continues to develop its wind and solar power markets; biofuels and electric vehicles markets, the country will not need to subsidise the oil sector.

*Chinese premier, Wen Jiabao,  has said his government will continue to offer oil subsidies if international oil prices increase. During an inspection of wheat fields in Xiaoshi Village in Linying County, central China's Henan Province, on 17 March, the premier said the minimum purchasing price for wheat would continue to increase in 2012.

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