Arabs’ decision evaluated

Press, Volume CXIII, Issue 33419, 28 December 1973, Page 11

Arabs’ decision evaluated

; (N.Z.P A.-Reuter—Copyright) , LONDON, December 27. The risk of Britain having to introduce petrol rationing had les- ! sened because of the ! Arab oil producers’ dei cision to ease their restrictions on exports, the Minister for Industry (Mr Tom Boardj man) said yesterday. i The Government, which I distributed coupon books to about 15 million motorists earlier this month, had guaranteed only that rationing ■ would not begin before January. Mr Boardman said also, however, that the Governmejit’s intention to introduce a three-day working week in most of British industry next month, to conserve fuel, was, unaffected by the Arab deci- : sion. I Observers in Beirut believe that, the Arab oil-producers 'will be trying in the next few weeks to gauge the psychological effect of their “Christmas gift” of oil concessions! to the Western industrialised 'world, and to Japan.

Any indication that the measures are being taken as a sign of weakness on the part of the Arabs may result in a quick return to a hardline policy, the observers say. If, on the other hand, the impact is regarded as positive, the trend towards relaxing the use of the “oil weapon” way even be taken a step further. SUPPLIES TO AFRICA The Arab oil-producing (countries have taken special measures to secure oil sup-, plies to Africa, and have given a mandate to Algeria to co-ordinate their action, it was announced in Algiers yesterday. The Arab Oil Ministers i have adopted measures to ensure that African countries, are fully protected against' possible sanctions by. Western oil companies, the Algerian News Agency reports. The Canadian Prime Minister (Mr Trudeau) said in an interview yesterday that Western nations affected by the Arab oil embargo could retaliate by “banding together to cut off certain resources . . . and food stocks, technology, or capital.” He added that the affected, nations resented the “econo-

mic warfare” that the Arab nations had begun. The Japanese slock market. posted its fourth-largesti daily gain in history yesterday, as investors and businessmen regained lost confidence on hearing of the Arab decision to reclassify Japan as a “friendly" country. The reclassification, and the promise by the Arab States to begin increasing oil production again, resulted in a gain of 156.58 points in the stock market average, which jumped to 4194.79. However, on the foreign , exchange market, the yen continued to weaken against the dollar, and pressure for another de facto devaluation of the Japanese currency continued. Banking sources say that the Arab decisions will not substantially improve Japan’s' deteriorating balance-of-pay-ments position. The Centra] Bank is believed to have sold an estimated SUS 120 m yesterday to

support the yen. and is he lieved likely to lower its in tervention point from the present 280 to the United States dollar to 290 or more before long. The Minister of Trade (Mr Yasuhiro Nakasone) said yes terday that the state of emergency proclaimed last Saturday would not be lifted. EFFECT ON INDIA In New Delhi, the Indian Minister of Finance (Mr Yashwantrao Chavan) said yesterday that the world oil crisis had profound implied lions for India’s balance of payments. He did not elaborate, but it has been estimated that the recent oil-price rise by Gulf producers will double India's petroleum import bill in 1974—if present import levels are maintained —to more than SNZB37m This would account for more than half of India's ex pected export earnings of about SNZI674m.