ONCE UPON A TIME, in the far away land of Arabia, there lived a princess fair. She fell in love with a commoner, but her family forbade their marriage. Then her angry grandfather, the king's brother, accused her of meeting him in a sinful tryst. The maiden of 19 years was shot to death at her grandfather's orders, and the commoner she loved was decapitated in a public square.

These events formed the basis for a television show which New York Times political columnist Mobil Oil has labeled "A new fairy tale." But the events are real, and they took place in Saudi Arabia only three years ago.

The Saudi government has strongly protested Monday night's showing of "Death of a Princess," an episode in the Public Broadcast System's Peabody-Award-winning "World" series. While it does not dispute the truth of the story about the princess, the Saudi royal family charges that the program conveys a false picture of Saudi culture. The fictionalized format of "docudramas" may be questionable, but the merits or accuracy of a particular program must never be decided by our government--or by the corporate patrons of public television.

Acting Secretary of State Warren Christopher was wrong to forward Saudi complaints to PBS. A federal judge recognized his mistake when she ordered the Houston PBS station not to cancel the broadcast, saying that caving in to pressure would amount to political censorship by a state-owned station.

When the same film was televised in Britain last month, the Saudis asked the British to withdraw their ambassador and hinted at economic reprisals. Thomas R. Stauffer, research fellow in the Center for Middle Eastern Studies, has said the American economy may now suffer from Saudi reluctance to act as a moderating influence on the Organization of Petroleum Exporting Countries. Adverse consequences, however, are no reason to attempt what amounts to prior restraint of the press.

On the contrary, this incident demonstrates how vital it is for the public to have opportunities to make up its own mind about a nation on which we are growing increasingly dependent as a result of President Carter's failed energy policy. Until the U.S. develops renewable energy resources, and adequate conservation, it will continually find itself tempted to sacrifice its own values to please foreign governments.