In These New Times

NEWINDPRESS.COM

JEDDAH: India on Sunday advocated for a price band for crude oil and blamed the speculators for the surge in global crude prices saying this is threatening to ‘wipe out’ economic gains of developing countries.
“The only way forward is for the both producers and consumers to find common ground… We propose that we adopt a price band mechanism,” finance Minister P Chidambaram said at the meeting of the Energy Ministers.

Rejecting suggestions that rising demand was leading to spurt in crude prices, he said “the causes for the current pandemonium in oil prices lie elsewhere: in unregulated over the counter markets and future trading in oil” and urged the oil producing and consuming nations to wrest control over oil trading from the hands of the speculators.

The surge in global oil prices had prompted government to increase fuel prices early this month that led to inflation surging to a 13 year high at 11.05 per cent in India.

“Three weeks ago, India passed on barely nine per cent of the required price increase to the consumers: the result is that the inflation measured by wholesale prices has crossed 11 per cent,” he said adding that even oil producers like Russia, Indonesia, Saudi Arabia and Venezuela faced double digit inflation rates.

He warned the oil producing nations that “if the global economy slows down or slips into a recession due to high oil prices, that will eventually hurt all of us… We firmly believe that the current level of international oil prices is in the interest of neither oil producing countries nor the consuming countries.”