CONTEXT AND JUSTIFICATION

"Oil prices have witnessed a considerable rise in recent years for a number of reasons:
i) the constant increase in the demand for oil products, particularly by the emerging economies spearheaded China and India;
ii) wars in the Middle East and Iraq;
iii) Speculations in oil and money markets.
Oil prices have risen from US$25 to about US$80 per barrel, that is, an increase of more than 200% over the last five years, although there has been a slight drop in oil price trends these last days. sed quia non numquam eius modi tempora incidunt ut labore et dolore magnam aliquam quaerat voluptatem.
The hike in oil prices is manna for oil producing countries, but constitutes a major problem to oil importing countries, especially poor countries. In fact, for oil producing countries, between 2000 and 2005, gains could be said to have doubled in value in current terms. For importing countries, the oil bill exceeds 10% of GDP, as against only about 2% for OECD non-oil producing member countries. This situation has a negative impact on the balance of payments, inflation, employment, growth, investments, debt service and the standard of living of the population.
Faced with this situation, the Sixth Assembly of the African Union held at Khartoum, Sudan, in January 2006, decided to set up an African Petroleum Fund whose main objective will be to mobilize resources to assist African oil importing countries in order to absorb oil shocks and facilitate the financing of their oil imports.

At the Seventh Assembly held at Banjul, Gambia, from 1 to 2 July 2006, this problem was once more examined, and the African Union Commission was requested to thoroughly consider it and come up with a detailed strategy to foster cooperation and solidarity among African oil-producing and non-oil producing countries. The aim was to:
i) mitigate the effects of high oil prices on the economies of non-producing poor African countries;
ii) optimise oil royalties for African oil producing countries;
iii) increase the quantity and improve the quality of petroleum products in Africa in a bid to reach the Continent's development goals.

At a meeting of African Ministers of Energy from non-oil producing countries held at Dakar, Senegal, on 27 July 2006, the African Non-Petroleum Producers' Association (PANPA) was launched with Senegal as the Chair. >>more