UN Rejects Iraq's Proposed Oil Pricing FormulaThe United Nations said November 28 that it had rejected Iraq's proposed pricing formula for sales of its oil under UN supervision in December because it did not reflect a fair market value.The disagreement affects 2.3 million barrels of crude which is exported every day, enough to cause turmoil on the international markets if supplies were interrupted. It follows reports that Iraq has asked its customers to pay a 0.50-dollar premium over the official purchase price from December 1, and to pay it into an account not controlled by the United Nations. UN officials have said that the requests for a premium was not made through the United Nations and that any company which paid it could open itself to charges of violating the sanctions imposed on Iraq at the end of the 1990 Gulf War. Fred Eckhard, the UN spokesman, told a press conference Tuesday that the Iraq State Oil Marketing Organization (SOMO) had submitted its proposals for the December pricing formula on November 22. "On the same day, the UN oil overseers advised the Security Council's Iraq sanctions committee that the prices as submitted by SOMO did not represent a fair market value," he said. "Based on the oil overseers' advice, the committee has been unable to accept the oil price mechanism for December," he said. Iraq has been asked to submit new proposals, the spokesman said. |
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