India takes initiative to control fuel prices taking major buyers China, Japan and South Korea together

New Delhi: When the crude oil prices crossed the $70 per barrel mark, financial experts raised an alarm saying that the ‘festive season’ for the Indian economy has now come to an end. After the oil producing countries decided to reduce crude oil production, crude oil prices began rising and reached an all-time high of last four years. This is increasing the pressure on the Indian economy. In this situation, India has taken the initiative to bring the major crude importing countries like China, Japan and South Korea together, to make efforts to bring the crude prices under control.

Indian Petroleum Minister, Dharmendra Pradhan revealed information about the initiative. The Petroleum Minister said that India is making efforts in this matter and has forwarded the demand that, consideration should also be given to the consumer countries along with the oil producing countries while fixing the crude prices. India will be making efforts to keep the rates offered by the oil producing countries reasonable, with support from important Asian countries like Japan, China and South Korea. The Petroleum Minister pointed out that the countries like Saudi Arabia are imposing special tax on crude oil supplied to the Asian countries and India, Japan, China and South Korea have to bear an additional burden of USD 8 billion.

Petroleum Minister, Pradhan appealed that in this situation, the four Asian countries should jointly negotiate the prices more effectively. India had made similar efforts to bring together the major crude importing countries in 2005. If the crude rates are increased it will be a major blow to the Indian economy. There is a lot of tension in the Gulf and the Persian Gulf. If the conflict escalates into a full-scale war, oil producers like Saudi Arabia, Iran, Israel and many other countries will get sucked into it.

In such a scenario, the crude prices will skyrocket. It is not possible to avoid the conflict. Even if the conflict is avoided, Saudi Arabia had demanded to take the crude prices to $100 per barrel, in the conference of the oil producing countries’ organisation ‘OPEC’. This has prompted the major countries to start efforts to ensure that they get their crude supplies at a reasonable rate. This has made it necessary for India to bring together major countries like Japan, China and South Korea to put pressure on the oil producing countries.

China had responded to the Indian appeal and agreed for joint negotiation with the oil producing countries, earlier this month. If Japan and South Korea also join, there will be powerful group of buyer countries, which will result in getting a reasonable rate for crude oil in these countries. While there are major upheavals at the international level, if India can get the crude at a reasonable rate, it will be a major benefit for the Indian economy.