Caution over oil
Any satisfaction — or even euphoria, as there may be in some quarters — at the decision of the oil-producing nations to peg prices for the next three months should be held severely in check, not simply because prices may then, nonetheless, go up, but because of the reasoning in the statement of the oil ministers; and because of the possible variations in the tactics of oil producing countries in the future. One must pay the greatest attention to the demands of the ministers that the oil-consuming countries must take measures to curb inflation. This is no merely arrogant attempt to interfere with our internal policies, as some commentators suggested the Shah of Iran's recent speech was. It is a simple statement of the fact that the major industrial nations have been exporting inflation for some years and, although oil prices were first increased as a political ploy, the Arabs and others have quickly realised that increases were economically necessary if they were successfully to purchase what they needed for the development of their counties. Also, if a major programme of investment in coal is now undertaken — and it is clear one will be — it must be remembered that the oil producers could, once it is under way, create even more disruption by reducing the price of oil (supposing political disruption was their end, as it well might be). The situation underlines the desperate need for a coherent and long term energy policy, and for the rapid and intensive development of nuclear power through independent British means.
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