Dominican President Leonel Fernández, in his final declaration at the Petrocaribe summit, called on member countries to remain alert to the excessive and unregulated speculation going on in the international oil markets. He said it has become a decisive factor in the immeasurable and disproportionate spike in fossil fuel prices.

“We consider that, following the indications of the experts, once the element of speculation is brought under control, oil that today costs $147 per barrel will drop to $90 per barrel,”

On Sunday, President Fernández referred to price speculation within the world oil markets as “an abuse and a violation” adding that it is destabilizing the economies of non-oil producing countries.

Speaking at the 5th Extraordinary PetroCaribe Summit in Venezuela, the Dominican President said that there is nothing to justify the continuous and systematic increase in oil prices. He said ten years ago, a barrel of crude oil cost only $10 as compared to its current price of $147 per barrel, according to the Presidential Office of Information, Press and Publicity.

He pointed out that speculation in the price of a barrel of oil is due, for the most part, to the futures market that is not being regulated and where someone buys oil they will never receive and someone sells oil they never had. “They are earning money on both sides.”

“What is happening is truly an abuse on an international scale…it is a violation and we need to understand that this abuse needs to be exposed, pointed out, denounced,” added the President.

He argued that this volatility in the price of crude oil has no basis in fundamental economic elements such as supply and demand or in any specific geopolitical element, but rather is pure speculation and, in part, to the financial problems in the United States generated by the mortgage and real estate crisis.

President Fernández suggested in the Summit that this market should be regulated and that marginal costs or a deposit in the futures market should be increased from 6% to 50% with the objective to reduce speculation in the international financial markets and get the price of oil back down to a realistic figure.

“We consider that, following the indications of the experts, once the element of speculation is brought under control, oil that today costs $147 per barrel will drop to $90 per barrel,” said President Fernández.

He noted that understanding these measures would contribute enormously to macroeconomic stability, the reduction of inflation and a drop in food, fuel and other prices in non-oil producing countries.

Speaking to members of the Petrocaribe countries, the Dominican president told his listeners that casino capitalism and gambling on the stock market has become a major destabilizing element in the global economy, provoking uprisings and political instability.

Fernández suggested that other oil-producing countries should follow the example of Venezuela and adopt similar mechanisms to alleviate the economic weight of the emerging countries.

The president said that Venezuela, in keeping with the Petrocaribe agreement, is showing the world “that in the face of speculation, in the face of greed, in the face of the insatiable search for wealth and riches, solidarity and generosity can prevail.”

Fernández suggested that other oil-producing countries should follow the example of Venezuela and adopt similar mechanisms to alleviate the economic weight of the emerging countries.

He also proposed that oil-producing and exporting countries, in an act of solidarity, should recycle, through the United Nations, part of their profits of the last 12 years in soft loans to long term loans and that there should be direct investment in those countries most affected by the oil shortages.

“And our proposal is that we come together as a block and solicit from the producer and exporter countries that they follow the example of Venezuela, the example of President Chávez who has shown himself and his country to be supportive through solidarity, not speculation,” said President Leonel Fernández in his final words to the Petrocaribe summit.