O.P.E.C. TALKS Oil prices lied to inflation?

Press, Volume CXV, Issue 33753, 28 January 1975, Page 15

O.P.E.C. TALKS Oil prices lied to inflation?

\I.GIFRS. January 27. The world's principal oil-exporting countries are framing a proposal which they hope will stabilise the world economy over the next fixe tears.

Their plan, details of which have yet to be worked out, | is to freeze oil prices in real | terms by pegging them to an I index of world inflation. I This Algerian proposal won ' widespread support at the I Organisation of Petroleum. | Exporting Countries confer-: ence which ended yesterday, i The Heads of States of the .O.P.E.C. countries are (expected to adopt the; (Algerian proposal as their i main contribution to the( I long-awaited discussions; ( between oil-exporting and (consuming nations. They are( 'due to meet in Algiers in

about one month to agree (on a joint approach fur a conference later this veai (between O.P.E.C. and consumer-governments. | After the five-fold increase in oil prices . \er the last 1.» (months, this would put the I onus for any further larg< oil price increase* on tne industrial countries. (goods they impoit erode thpurchasing power ol the O.P.E.C. countries. (hex would redress the balance tv putting up the price of oil b the same amount. But these cont iliat pi posals on prices, which won general support at the con ference, were accompanied by suggestions that the O.P.E.C. should take a tough stand if any one of its 13 members came under attack. Algeria, the host Government. proposed that the O.P.E.C. should resort to cutting off oil supplies to anx country which committed aggression against a memberState. : This is regarded by observers as a response to (recent statements by Amen can leaders that the use of I force against Arab oil(Producing States could not (be completely ruled out if | the West faced economk | strangulation.