India on Thursday charged some of the oil producing nations and companies with building inventories that resulted in "unjustifiable" rise in crude prices globally and impacting the economic growth of developing nations.
"Our first concern is the rising global oil prices. It is possible that some countries and companies are increasing their inventories of oil. It is also possible that oil producing countries are exploiting the situation and raising the prices of oil," Finance Minister P Chidambaram said at a Confederation of Indian Industry conference in New Delhi.
"If oil prices continue to rule high, it will rob developing countries like India of a critical percentage of their potential growth. In fact every $5 a barrel increase in oil prices affects our GDP by nearly 0.5 per cent and also contributes to inflation," he said.
In view of the surging global oil prices and lower than expected monsoon, Reserve Bank of India has pegged down GDP growth forecast to 6-6.5 per cent from the earlier stance of 6.5-7 per cent while revising upwards inflation projection to around 6.5 per cent from 5 per cent.
Although the gap between supply and demand of crude has narrowed, he said, "there is still a small surplus on the supply side."
"Even if the demand has risen especially from China and India, there is no justification for any price beyond $35-40 a barrel," the finance minister said referring to his detailed discussions with World Bank officials and global investment community in the US and UK a few weeks ago.
Admitting that the global oil prices were "out of our control", Chidambaram asked India Inc to innovate and invent ways of cutting cost to beat the impact.
"If fuel prices are high, you (industry) must become even more innovative and inventive in cutting costs elsewhere," he said.
Global crude prices, now hovering at over $55 a barrel, had pushed up inflation to 8.55 per cent in August.
However, fiscal and monetary measures by the finance ministry and RBI respectively, have brought down inflation to 7.1 per cent in the week ended October 9.