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Up, up and away

  • 20 July 2006
  • Hindustan Times

There is a growing consensus in the international energy business that oil will reach $100 a barrel, plus or minus $5, by December. Economies, which will best handle the oil price spike that is expected to rebalance the energy markets, are those that have been most honest about oil prices. In other words, they have not disguised how high global oil prices have become to either individuals or firms. And they have focused on stepping up growth through more reforms and not holding down interest rates. Dr Leena Srivastava of TERI has pointed out, 30 to 50 per cent of India's energy production is wasted because prices are so out of whack with reality. Higher prices would have helped reduce this sort of leakage, making it easier for India's economy to post solid growth even at $100 a barrel. Full Text

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