Saudi Arabia favours cheaper crude oil

Saudi Arabia, the largest producer of crude oil in the world, is in favour of working out a strategy to cool the overheated global crude oil prices.

The country which supplies almost 23 per cent of India's crude oil import says the global price of crude should be in the region of $ 22-28 a barrel compared to the current prices of $ 40-50 a barrel.

"We are talking to other OPEC members how to devise a strategy to bring down the prices of crude oil. This is not helping anyone except the traders at the exchanges," Saleh Mohd Al Ghamdi, ambassador of Saudi Arabia in India, said on the sidelines at the CII Partnership Summit here today.

However, he remained non-committal on whether Saudi Arabia would raise its output or would push the agenda of pumping more oil in the next OPEC meet.

"We raised our production but that did not result in reduction in prices. Rates are being decided in exchanges of New York, Singapore. We are not to be blamed," he added.

Ghamdi pointed out that high crude oil prices was hurting the people of Saudi Arabia as well as they imported most its requirement from outside.

With the prices pushing up inflation, Saudi citizens were paying more for their import.

High crude oil prices are however, were hurting the developing economies like India more than anybody else.

India imports over 70 per cent of its requirement from west Asia, west Africa and other places.

Indian crude oil imports during April-November of this year stood at 64.883 million tones, which was 9.2 per cent higher than 59.419 million tonnes imported in the corresponding period of the previous year.

On the other hand oil product consumption was 4.4 per cent higher at 72.875 million tonnes as against 69.781 million tonnes a year ago, indicating a steady economic upturn.

Alarmingly, Indian crude oil production fell 1.6 per cent to 21.08 million tonnes in the first eight months of 2004-05.

Around a third of the ruling high global crude oil price, feel industry experts, was on account of 'fear premium'.

Imports may cost India $ 6 billion more in this fiscal as the crude oil import bill could rise to $ 24 billion from $ 18 billion in the previous year.