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The Arab world's governments are heavily dependent on revenue from export of oil. Furthermore their economies are not well integrated with international markets. They need to support their own prices to avoid a budget deficit.
Because there is no control in any mean for the prices in the markets. As well as the greed of the traders, distributors, manufacturers to have a lunatic margin for profit regardless the results of the total prices.
Due to many reasons such as dependency on oil, foreign imported products food & non-food items(almost everything), brand conscious trends (US, EU and AU imported products/brands) and on top high Govt. spending(internal). One of the main cause is loose cost control within many ministries including ARAMCO, MOWE, SWCC, NWC etc.; lack of planning and loop holes in almost every sectors. The prices are seldom regulated, no control in property/real estate rents etc.
BEC THE GOVERNMENT DEPEND ON THE OIL PRICES TO SUPPORT OTHER ACTIVITIES WHICH HAVE NOT ANY SOURCES TO DEVELOPMENT BY IT SELF , THIS ACTIVITIES RELATED TO OIL ENHANCED
With the impact already effecting the oil & gas industry having thousands of jobs and their livelihood lost, imagine what will happen if the price does come down further? The minority might benefit with the majority effected!
I began to think , that prices outside the alliance of Arab states is controlled by the " Broker " which aims to lower the selling price of oil and the Arab countries is more purely political tendencies .
The answer iis twofold.When the price of oil (a major input) went up, so too did wages and salaries. Labour became more expensive, and in the long term, when oil dropped in price, labour remained more expensive (note: unlike oil, labour costs -wages and salaries- go up, but do not go down) which meant that production costs were higher for the industries of the country -namely services- whereas the wages demanded rose. In the long term there may be some downward spiral in wages, but this has not yet been proven to be true. How many people have had a 'wage cut' since the oil price boom of? Not many; if at all.
The Arab world's governments are heavily dependent on revenue from export of oil. Furthermore their economies are not well integrated with international markets. They need to support their own prices to avoid a budget deficit.
as a matter of fact, I am in Toronto, Canada prices of oil per liter is not getting any better, how can we explain that? I think the poor Arabs are target for criticism and for that reason sometimes we misplace logic. global oil prices are working with magic, I have yet to see a conversant economist for real explain the reality current conflict of supply and demand of oil. all talks about oil are coming from a poor consumer like myself, a liar for his interest or from politically motivated talks. prices will comeback, what oil producers will do with their money is a better topic.
abdirizak omargodane, Toronto
This question is anti-Arab World.
The question that should be asked is: Why don’t prices fall in Western countries (in the U.S. and Europe)? Since the price of Arab oil which they import and depend on has fallen sharply, the prices of all other goods should have also fallen. When oil prices go up the prices of everything else also go up, however, when oil prices fall, prices of other goods stay the same or sometimes may fall very slowly, if ever. Arab states import almost everything aside from oil and, therefore, have no control over the prices of imported goods.
Because there is no government regulation to control price increases in the markets.
