The "feedstock issue", a highly contentious issue in Saudi Arabia's bilateral negotiations with major petrochemical producing countries seems to have been resolved. Concerns abound that Saudi Arabia was charging an "unfairly" low price for its petroleum-based and natural gas-based feedstock (methane, ethane, butane, propane and natural gas or liquefied petroleum gas) to it domestic petrochemical producers, thus giving them a huge advantage over foreign-based producers.
The US was least affected as it is not a global petrochemical player like Europe, Asia and Saudi Arabia and hence did not see Saudi production as a threat to itself. The issue was left unresolved when the EU-Saudi Arabia bilateral agreement was inked in 2003. After the US bilateral agreement with Saudi Arabia in September 2005, further negotiations resumed with the EU and the issue was finally resolved. In the end the Saudi arguments won the day and the existing pricing regime will remain essentially unchanged after the WTO.
31-Jan-06 
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