WASHINGTON: The head of International Energy Agency has urged USA and developed countries to increase the tax on gas and other fossil fuels as the oil price all over the world is low. In an interview during a recent trip to Washington, Maria van der Hoeven didn’t shy away from the controversial issue of fuel taxes or on normalizing relations with Cuba, which she said provided opportunities for the United States to loosen its ban on the export of crude oil. Of the major developed nations, only Mexico has a lower federal gas tax, she said. The IEA was created in response to the oil supply crisis of 1973-74, but today serves as both statistician and research guide for 29 developed nations who are large oil consumers. Van der Hoeven is a former economics minister for the Netherlands.
Here are some of her thoughts, edited into a question-and-answer format: We are not a climate agency . . . but what I really do hope is that these low oil prices will be used by policymakers as an opportunity to cut down fuel subsidies in those countries (such as Indonesia, Malaysia and Thailand) that do have them. Whether it is a carbon tax or you do it in a different way . . . put a price on carbon. Because now with the low prices, the economy won’t be hurt, or will be less hurt, than in any other time so use that opportunity. Stick to your policies on energy efficiency, fuel efficiency, since it is helpful for your climate policies as well. Now it is possible. With high gasoline prices at the pump and cars that drink a lot of gasoline, it’s a much different situation than you have now. You can’t just talk about it. Put your words into action. It’s very early to answer that question. . . . We all know that the Cuban economy is in a very difficult situation. Much needs to be done there. The power (generation) needs are greater than the oil needs, but the power has to come from something. The problem in Cuba is not just about power needs. It’s about transmission lines, and not all people have access to energy. There will certainly be growth in demand, let’s be honest about that. This is not new. We have seen this happen before, this huge volatility . . . although it hasn’t always been with such short notice.