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Oil Toil
FM: India to follow up price band idea

Jeddah, June 23
India has said it will follow up its suggestion on having a price band for crude oil once the producing nations reflect on the idea, even as it asked them to step up oil output.

“It (price band) is an idea that I have mooted in the earlier IMF meetings and it is the first time I am addressing an oil ministerial meeting. So let them reflect on that, we will follow it up,” finance minister P. Chidambaram told NDTV before leaving for India.

Explaining his proposal mooted at the energy ministers’ meeting in Jeddah, the FM said the suggestion was that producing countries would assure the world that prices won’t rise above a level and consuming countries would assure the world that prices would not fall below a level, between which prices can be determined by the market forces.

Crude oil prices were not under India’s control, he said and added that the prices would cool down only if producing countries increased supply and the countries concerned regulate over-the-counter trade or futures trading in oil.

“In August, 2007, it (crude prices) was 70 dollars a barrel and a few days ago it has touched 140 dollars a barrel... Those are not under India’s control... So we have urged producing countries to increase supply. We have urged countries where these financial transactions are taking place to step in and regulate these transactions,” he said.

At the ministerial meeting here, Chidambaram had yesterday blamed speculators for the surge in global crude prices and said that this was threatening to ‘wipe out’ economic gains of developing countries. — PTI