NEW DELHI-Oil Policy on Wrong Tracks

THE calculations of the Petroleum Ministry about the supply of crude oil have been totally upset by the latest developments in the world oil market. The international oil companies have been obliged to agree to substantial increase in crude prices in response to the demand of a group of producing countries. The Petroleum Ministry had exuded much satisfaction when a few months ago it had succeeded after a prolonged tussle in securing a reduction of a few cents per barrel in the price of crude imported by the foreign oil companies for refining in India. The assumption then was that the downward trend in crude prices in the world market would continue and that India would continue to receive additional concessions on this account. While fundamental changes in the operation of the foreign companies in the country were envisaged, among them majority participation with these companies, it was assumed that the companies would continue as the agencies to import crude, passing on marginal -benefits to India in the process.