The facts are wrong. Petrol price did not increase after Pokhran II significantly. They did after the Iraq invasion, though soon after it slumped. It started raising after an Indian working for Goldman Sachs predicted that price of oil will rise to $100 in 2004. Soon a cartel led by Goldman Sachs that included financial biwigs like Morgan Stanley joined by hedge funds started investing in oil futures in largely unregulated commodity markets. Here unlike equity markets, forward positions could be taken as low as 6% margins. That means if a forward contract is taken, you need to provide only a margin of $6 for a position that values $100.
It is estimated that nearly $4-5 trillion dollars are invested in commodity markets. Despite Congressional investigations that conclusively proved the links of speculation, the Bush and Gordon Brown Administration refuses to ban speculation despite it causing global inflation.
