The Oil Crisis in India

By Prof. GURUPRASAD MURTHY, Dr. F. P. ANTIA

Summary

This Forum of Free Enterprise booklet, “The Oil Crisis in India,” prints the text of a public lecture delivered by Prof. Guruprasad Murthy under the auspices of the Forum in Bombay on 22 November 1973, in the immediate aftermath of the West Asian War and the OPEC price escalation. Murthy, a Reader at the Jamnalal Bajaj Institute of Management, argues that India faces a ‘super crisis’ as far as oil is concerned and that national energy policy, and oil policy in particular, must be recast. The cover also credits Dr. F. P. Antia, though the rendered body is one continuous argument bylined to Murthy.

Murthy traces the steep rise in crude prices following the October 1973 OPEC actions, the strain on India’s foreign exchange, and the inflationary, demand-driven dynamics of an oil-importing economy. He weighs petrol rationing against its administrative difficulties and the risk of black markets, and argues that the market mechanism cannot by itself make demand responsive to price unless income-tax legislation is suitably amended and honestly administered. His prescriptions are organised under headings such as ‘Social Management’, ‘Technology Management’, ‘Supply Position’, ‘Police Management’ (pilferage in the docks) and ‘Foreign Investment Management’, and he calls for diversifying crude sources (Indonesia, USSR, rupee-payment and barter deals), rationalising road transport and excise/sales-tax policy, and a selective, non-confiscatory stance toward Western oil companies.

The booklet closes with statistical appendices drawn from the ‘Oil Statistics Journal’ and the Petrol Dealers’ Association — petroleum production and consumption, crude oil requirements and imports, motor-vehicle figures, and a year-by-year table of petrol and HSD selling prices — followed by the standard FFE disclaimer, an A. D. Shroff epigraph, and a colophon dating the booklet 15 January 1974 and naming M. R. Pai as publisher for the Forum.

Key points

• Text of a public lecture by Prof. Guruprasad Murthy delivered for the Forum of Free Enterprise in Bombay on 22 November 1973.

• Frames India’s post-1973 oil situation as a ‘super crisis’ requiring a recast of national energy and oil policy.

• Links the crisis to the West Asian War and the October 1973 OPEC price escalations and India’s foreign-exchange strain.

• Argues the market mechanism alone cannot make demand price-responsive without honestly administered income-tax legislation.

• Examines petrol rationing, weighing its administrative difficulties and black-market risk against austerity goals.

• Prescriptions grouped under Social, Technology, Supply, Police, and Foreign Investment ‘Management’ headings.

• Calls for diversifying crude sources (Indonesia, USSR, rupee-payment and barter deals) and a selective, non-confiscatory policy toward Western oil companies.

• Includes statistical appendices on petroleum production/consumption, crude imports, vehicles, and petrol/HSD price history.

• Cover credits Dr. F. P. Antia as co-author; colophon dates the booklet 15 January 1974, published by M. R. Pai for FFE.

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