By Reuters
Sunday November 26, 10:05 PM
NEW DELHI (Reuters) - Oil producing nations are exploiting oil consuming countries with high oil prices and India is being deprived of 1 percent of economic growth because of costly oil, its finance minister said on Sunday.
Finance Minister Palaniappan Chidambaram told a regional World Economic Forum that speculation was driving oil prices, as prices had fallen from near $80 a barrel to $58 when there had been no change in demand and little change in supply.
"I continue to say that it is speculation driven and the world must come to some kind of understanding between oil producing countries and oil consuming countries to how these shocks can be reduced. We are at risk here," he said.
India imports 70 percent of its oil. The Asian Development Bank says every $10 rise in average global oil prices over a one-year period hurts Asia's economic growth by 0.6 percentage points.
"The world must come to terms with the fact that oil producing countries are exploiting the requirement of oil consuming countries," Chidambaram said.
"India's being robbed of at least 1 percent of growth because of high oil prices."
India's economy, Asia's fourth largest, is forecast to grow about 8 percent in the fiscal year to March 2007, although the government is keen to boost this to nearer 10 percent to bring down its fiscal deficit and lift nearly a quarter of the population out of poverty.
Oil's descent from a record of $78.40 in July prompted OPEC in October to cut oil output by 1.2 million barrels per day from Nov. 1.
Prices over the past few weeks have dipped below $55 before rebounding to about $60 on Friday.
"It's not in our hands. Until we search for more oil and gas reserves we are dependent on the world," Chidambaram said.
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Monday, November 27, 2006
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