Sujay Mehdudia

To urge OPEC members to raise crude oil production

Saudi Minister has invited Deora for “frank and honest” talks

“High prices will seriously affect economic growth of most countries”

NEW DELHI: Worried over the fallout of rising crude oil prices on the financial health of the oil marketing companies, economic growth and political front, Petroleum and Natural Gas Minister Murli Deora will visit Saudi Arabia on June 22 and hold talks with leaders of the Organisation of Petroleum Exporting Countries (OPEC).

Mr. Deora will urge the OPEC to raise crude production to stem the price rise that has threatened to derail import-dependent economies such as India.

Mr. Deora’s visit is in response to an invitation from Saudi Arabian Minister for Petroleum and Minerals Ali-al-Naimi to have “frank and honest” discussions on the current state of world petroleum markets and unprecedented volatility.

Mr. Deora has already written to Mr. Naimi seeking a hike in OPEC output.

He said:

“I request you to advice major oil producing countries to raise their output to calm the market further and revitalise the global economic growth.

“The world is in the midst of an unprecedented rise in oil prices which have risen from about $ 29 a barrel in 2000 to touch $ 139 a barrel in June 2008.

Cost pressures

“Macro economic conditions and volatile capital markets have thrown financial markets into turmoil, leading to significant cost pressures from an all-round rise in prices of commodities.

“The current high oil prices, coupled with the turmoil in the financial markets would seriously impact the economic growth of most countries and in the longer term affect both producers and consumers.”

Pat for Saudi Arabia

Complimenting Saudi Arabia for unilaterally deciding to raise production by 3,00,000 barrels a day and exporting it mainly to the Asian market where the demand is very high, he said such actions would help the supply side management and stabilise the oil market.