Parleys with OPEC

Parleys with OPEC After that shocking statement (made over a week ago) that the government could do nothing about the inflation, Union Finance Minister P Chidambaram seems to have returned to terra firma in an effort to tackle galloping oil prices. On Sunday, the Finance Minister was in Jeddah, urging a meeting of the members of the Organization of Petroleum Exporting Countries (OPEC) to take a more rational stand on fixing crude oil prices. After all, petroleum prices have zoomed from just $50 a barrel only last August to around $135-150 now, thereby triggering off the worst inflation in 13 years in India and bucking similar inflationary trends all over the world. Chidambaram said that the only way to check sky-rocketing prices and the resulting inflation was for both consumers and producers to find common ground, adding that a price band mechanism would instil mutual confidence. ‘‘Consuming countries must guarantee that oil prices will not fall below an agreed level and producing countries must guarantee that oil prices will not rise above a guaranteed level,’’ he said at the ministerial segment of the Conference of Oil Producing and Consuming Countries in Jeddah that had been convened at Saudi Arabia's initiative to discuss what it said was an ‘‘unjustified rise’’ in prices of petroleum products. Chidambaram also called on oil-producing nations to re-assert their leadership in price formation and not remain passive spectators of speculation and paper trading in oil.One could not think of a more rational mode of arriving at fair prices for what nature provided as bounty to some countries but did not to many others. However, there is no accounting for human cupidity, whether individual or collective. And that perhaps is the foremost factor that has almost trebled crude oil prices in a span of just ten months. There were other possible reasons that we had referred to in an earlier editorial on the subject — like the desire of the Arab world to teach the United States a lesson for its illegal occupation of Iraq as also for consuming 75 per cent of the world's fossil fuel. We had also said that this business of OPEC trying to teach the US a lesson hurts all developing countries of the world, especially those that have no petroleum resources. What makes it all the more difficult to bear is that OPEC, which meets just about a third of the world's oil requirement, should be able to hold the world to ransom over oil prices. At the same time, what should make us thankful for small mercies is that Saudi Arabia, a front-ranking producer of oil, should not only have convened this conference on the recent rise in oil prices, but has said that the rise was unjustified. This is indication enough that some soul-searching is taking place even within OPEC. While these initiatives by India are timely, there is much else that needs to be done to ensure that we do not have to be at the mercy of OPEC for all times to come. As we said earlier, we need to develop and augment our own resources of petroleum products. This involves exploration of all the resources of oil in our own country, as well as bidding for oil producing blocks in Myanmar and other neighbouring countries that were deemed uneconomical earlier, but have ceased to be so now with oil prices having more than doubled. We must also get our scientists to start working frantically to find alternative sources of energy. And having done all this, we must address ourselves ruthlessly to the task of eliminating waste of energy from government establishments. After all, why should the public end up paying for what the government wastes? Source: sentinel assam editorial