Dealing with High Oil Prices

--P. Neelakantha Achary, Staff Writer

Recently, the UPA government has hiked the prices of petrol and diesel. This rise will be a burden on the common men, as they will have to bear the burnt of high oil prices and taxation. The inevitable rise has been attributed to the rise in the price of crude oil prices in the global market. A fluctuation in the supply or price in the crude oil, result in a big impact on global economy. This is global phenomenon and need to be tackle with proper attention.

The situation becomes out of control, as the oil prices touched $ 106 a barrel. The world should be prepared to face worse situation in near future. In the short run, the production would not be possible to manage the supply side of the oil. The impact of rise in oil prices will be high on developing economies like India and China.

Considering the global consumption rate, it is expected that in future, the entire world will depend on the Middle East region for the supply of crude oil. The consumption of oil is another aspect, which is responsible for the rise in the prices. Countries need to focus on the alternative sources and supply mechanism.

Oil consumption in Asia and world has been in the rise for the past couple of years. It could result in a shortage of supply and could ultimately lead to sharp rise in prices. The conflict in the Middle East was the foremost reason for the rise in global oil prices. All countries could reach a consensus to address this problem. A global mechanism and better collaboration between the nations and the Middle East would help the world to deal with the high oil prices.