Drawing the world’s attention on the need to put an end to how the current world crude oil prices were being determined on a purely “speculative” basis, finance minister P. Chidambaram today pointed out that the country’s growth story could have been far better but was being “robbed” of attaining higher GDP growth figures on account of the high crude oil prices.

Speaking at the India Economic Summit held here today, the finance minister said that the manner in which the crude prices were currently moving shows that these are not based on demand and supply factors but were driven by speculative forces.

He specifically drew attention to how the crude oil prices recently dipped from a high of $78 per barrel to $55 per barrel when there was no real or significant change in the demand and supply of oil. This, he said, was an indication that crude prices were being determined on the basis of speculation and not on the basis of demand and supply factors.

The FM said: “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.” For a country that is clocking an over 8 per cent growth, Chidambaram said “India is being robbed of 1 per cent (GDP) growth” on account of the high crude oil prices. He drew the attention of how the country’s future generations would have to pay for this speculative behaviour as currently the government has to take recourse to oil bonds to cushion the impact of the high crude prices.

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