As Finance Minister P Chidambaram told oil producing countries not to remain a "passive spectator of speculation", Saudi King Abdullah launched an offensive against oil "speculators" saying the "abhorrent acts" by a group of elements were responsible for the quick and unjustified increase in petroleum prices in the recent times.
Chidambaram, accompanying Petroleum Minister Murli Deora as part of the Indian delegation to an emergency meeting of the world's energy ministers, said the only way forward for both the producers and consumers is to find a common ground.
"We have a proposal that will instil mutual confidence. We propose that we adopt a price band mechanism," Chidambaram said.
Referring to questions being raised about the fundamentals of the oil industry, he said there is a need for the industry to reassert its leadership in price formation and not remain a passive spectator of speculation and paper trading in oil.
Rejecting suggestions that rising demand was leading to a spurt in crude prices, the finance minister said "the causes for the current pandemonium in oil prices lie elsewhere: in unregulated over-the-counter markets and future trading in oil".
Chidambaram urged the oil producing and consuming nations to wrest control over oil trading from the hands of the speculators.
"The global hydrocarbon community must address this situation through appropriate supply side responses and calm the oil markets," he said.
