''These runaway prices require producer nations to seriously contemplate the management of production and pricing policy and to reflect on the crippling burdens that expensive oil imposes on poorer nations,'' he said at the Development Committee, the policy-making body of the World Bank, here yesterday.
Mr Chidambaram said the 'dramatic rise' in the price of crude oil and food was adding to the woes of the developing world.
The Minister also criticised the United States (of course without naming it) where corn and wheat are being used to produce an alternate source of energy (bio-fuels).
''The unprecedented increase in food prices has come on the back of high energy and fertiliser prices and an increased use of food crops for bio-fuels,'' he said.
''In a world where there is hunger and poverty, there is no policy justification for diverting food crops towards bio-fuels,'' Mr Chidambaram said.
He visualised that these food prices which hit the poor hardest were expected to remain firm in the medium term unless ''we make serious interventions.'' The demand for bio-fuels would probably increase and energy and fertiliser prices could be expected to remain high in the medium term.
He also wanted the developed countries to cut off subsidies on food crops for bio-fuel production. Converting food into fuel is neither good policy for the poor nor for the environment,'' the Finance Minister said.
In this context, he welcomed World Bank President Zoellick's call for a ''New Deal for Global Food Policy'' to focus on hunger and malnutrition. ''It is becoming starker by the day that unless we act fast for a global consensus on the price spiral, the social unrest induced by food prices in several countries will conflagrate into a global contagion leaving no country -- developed or otherwise -- unscathed,'' he said.
He wanted the global community must collectively deliberate on immediate steps ''to reverse the unconscionable increases in the price of food which threatens to negate the benefits to the poor nations from aid, trade and debt relief.'' The Minister noted with concern the decline in foreign aid has declined both in 2006 and 2007. ''This flies in the face of the Monterrey Consensus target of achieving ODA levels equal to 0.7 per cent of GNI and the Gleneagles commitment in 2005 to double ODA to Africa in five years,'' he said.
He made out a strong case a fair, equitable and transparent global regime for resources and technology transfers to address climate change.