Oil Crisis
The Organisation of Petroleum Exporting Countries (OPEC) announced the first price hike in petroleum products in 1974. The average import price of crude oil for India has increased ten times than what it was. The crude oil Import rate is roughly about Rs. 925 per ton. The international oil traders have an unholy monopoly over the oil and intend making huge profits. Domestic taxes on oil products have also rapidly increased. No restriction could be put on the use of oil and as a result the market prices of oil continue to go up.
As our exports have increased in the past years, we are able to absorb the shock in the rise of oil prices. But for a developing country like India, payment of less than half of her export earnings for the import of crude oil is a heavy penalty. The periodic increase in oil prices has resulted in the balance of payment deficit, increasing unemployment and other economic crises in the non-oil producing countries which are under developed.
The developed countries are to be blamed for the world oil crisis. They are preserving their own standard of living at the cost of the developing countries. Just as the developed countries in buying cheap copper and rubber, they have been interested in Cheap-oil. None of ‘the developed countries have been interested in developing the economies of the under developed countries including those in OPEC. But they sold finished goods at very high prices to the developing countries.
This led to the inference that the international trade between developed and under developed countries was carried on unequal terms. It was agreed at the United Nations that the developed countries should contribute one to two percent of their annual domestic products for the development of the under developed countries. But the developed countries did not follow this agreement. This forced the OPEC to retaliate. The oil prices were increased in order to spite the developed countries but the developing countries had also to pay the increased price. This price hike benefited all oil producing countries.
The United States of America is badly hit by the increasing oil prices. But they do not seem to realise their folly even though the dollar is depreciating in value. The price of dollar and other international currencies must be stabilised. The developed countries must under-stand that they cannot continue to maintain a high standard of living at the expense of the developing countries.
The OPEC countries must also realise that they should not punish the developing countries for the wrongs done by developed countries. This is high time that all the countries in the world get together to work out a policy that will ensure equitable terms of trade to everyone. Unless this is done, the oil crisis would grow into a world crisis.
