The recent period has shown a skyrocketing increase in the crude oil prices which has disrupted the lifestyle of the people to a large extent. The rise in oil prices has become a hot topic of discussion among the cosmopolitans.

Still wondering why there is a steep hike in oil prices in recent period? The answer lies in the channelization of billions and trillion of dollars into commodity investments and commodity derivatives by large financial institutions, pension funds, hedge funds etc.

The rise in crude oil prices is indeed the root cause behind the overall inflation in the country.

Efforts are on the full swing to curb this rising menace. Recently, the Finance Minister came out with the suggestion of implementing 'price band' on the oil output. Under this idea, the producing countries will assure the world that prices will not rise above a level and consuming countries will assure the world that prices will not fall below a level, between which prices can be determined by market forces.

India is an oil consuming country. Thus, the crude oil prices are not entirely under India's control. The prices will cool down only if producing countries increase the supply and the countries concerned regulate over-the-counter trade or futures trading in oil.

It would be wrong to conclude that rising demand paves the way for spurt in oil-prices. Rather, it is the speculators who are to be blamed for escalating oil prices. The process of speculation in global oil prices is also threating to 'wipe out' economic gains of developing countries.

A word of caution:- if the global oil prices continues to rise and as a result the global economy slips down or slips into recession , that will eventually hurt all of us.

Let's keep our fingers crossed and wait for the outcome of implementation of 'price band' on oil output.