India hoping settle oil problems by Saudi Arabia's king

India is looking to this week's visit by Saudi Arabia's king as a chance to lobby for lower prices on the oil it desperately needs to keep fueling its growth as an economic and military power. For Saudi Arabia, King Abdullah's visit to India offers his country a chance to strengthen ties with a country many believe is an emerging power. On the eve of Abdullah's departure Sunday for his tour of Asia, which began in China, Saudi Arabia's Arab News said in an editorial that India and China were "as much commercial giants as the United States or Europe."

Abdullah is slated to be the guest of honor at India's Republic Day celebrations, a highly symbolic invitation that underscores the growing political ties between two countries that spent nearly a half-century on opposite sides of the Cold War divide.

Saudi Arabia currently supplies a quarter of India's oil needs, and officials in New Delhi are eager for face-time with Abdullah, although no major agreements are expected to be signed.

"High oil prices are certainly likely to figure at the delegation-level talks," said a top official at India's Petroleum Minister, Talmeez Ahmed. India's economy is among the world's fastest growing and is expected to expand by about 8 percent this year, despite high oil prices, which settled at US$67.06 a barrel late Tuesday on the New York Mercantile Exchange.

But there were fears that high prices could eventually hamper growth and spur inflation in India, which imports 70 percent of its supplies. In fact, India's central bank cited the high global price of oil when it raised some interest rates Tuesday.

King Abdullah acknowledged the price concerns in an interview this past weekend with India's NDTV news channel, saying "the price needs to be at a more moderate level."

He added: "We would like to provide India's requirement of energy in the future." Ahmed, the Indian oil ministry official, said India was not looking to raise imports from Saudi Arabia, which stand at about 25 million metric tons a year.

But India is looking to play a larger role in Saudi Arabia's natural gas sector, and for Saudi investment into its oil industry, he said. A small agreement on oil cooperation between a private Saudi private company, Al Manar, and the state-run Engineers India Ltd., is expected to be signed during the visit, which began Tuesday and ends Friday, Ahmed said. He did not elaborate, reports the AP. N.U.