The fair price for crude is between $50 per barrel and infinity. While addressing a press conference in Caracas in January this year, the Venezuelan President, Hugo Chávez, went on record saying that he hoped that the oil prices would not go above $100 per barrel as the price of crude oil had fallen close to 10% since it broke into triple digits early that month. "[The price of oil] is there, close to 100 dollars, hopefully it won't keep going up, hopefully it will stabilize," Chávez said. However, what has `stabilized' further is Chávez's resolve to tighten his government's grip over oil operations in the country. The latest in this saga of nationalization of oil operations is the introduction of what is fittingly called the "Windfall Oil Tax".
The sky-high oil prices on world markets have, no doubt, resulted in an unprecedented windfall in revenue for oil companies and oil exporting nations. However, the Chávez government, in keeping with its tradition of getting into confrontations with global energy giants through repeated hikes in taxes and royalties and arm-twisting them into rewriting contracts, has come up with a brand-new legislation to demand its pound of flesh from the oil companies' `windfall' profits.
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