G8 Meet Focus on Oil Crisis

After a record one-day jump in crude oil to $139 a barrel, the Group of Eight (G8) organisation met on 06-07 June in Japan in Aomori, on the northern edge of Japan's main Honshu island, amid fears soaring oil prices could damage the global economy. Generally G8 discusses economic issues for stabilizing profits in trade and other economic transactions. But the latest meet focused  on rising oil prices and food shortage. Efficiency, shared technology and the promotion of alternative power sources were high on the agenda of the energy ministers of the world's leading industrialized nations.

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Latest spike in oil prices coincided with a dollar slump, plummeting share prices on Wall Street and US unemployment suffering its biggest rise in 20 years. Some analysts have suggested that prices would reach as high as $200 a barrel during the next 18 months. The benchmark light, sweet crude oil is more than twice the price it was a year ago. China also made clear it had no time frame for moving towards lower subsidies, saying they needed to consider carefully how removing them might affect the country's social and political stability. India insists there is no agreement to remove the subsidies altogether. Its representative said the country was not ready to move to a position where the market decided the price its citizens should pay for oil.

Australian Prime Minister Kevin Rudd said a "blowtorch" needed to be applied to OPEC to urge the cartel to increase production. The ministers of the five nations meeting on 07 Jun also agreed on other issues such as developing clean energy technologies, improving efficiency and on better cooperation in strategic oil stocks. Business Secretary John Hutton, who represented Britain at the meeting, called for an increase in oil production to push prices down. He added that Britain and other Western countries need to help developing nations reduce the environmental impact of their energy use. The key energy-consuming nations, including the United States, China, Japan South Korea and India, called on oil producers to increase output to try to control the soaring prices.

But disagreements surfaced on fuel subsidies, which the US and others feel have helped boost prices. Samuel Bodman, US energy secretary said that the demand is increasing because a lot of nations are still subsidizing oil, which ought to stop.

US Energy Secretary Samuel Bodman said: "It's not good for producing nations to see the US struggling economically. They depend on us to be a significant engine in world economic activity." Bodman said the subsidies in China and India had helped drive demand and so increase prices. "We know demand is increasing because a lot of nations are still subsidizing oil, which ought to stop," he said. Bodman said even quick action at the Aomori talks might not bring immediate benefits.

G8 meet sought to compel the OPEC to increase oil production to their maximum capacity and reduce prices to augment the emerging international price raise crisis. The heavy fuel subsidies are used throughout the developing world to try to ease the burden on the poorest in society. Sharp differences, therefore, surfaced on fuel subsidies offering enough scope for mutual criticism while arguing the their own case. The Organisation of Petroleum Exporting Countries (OPEC) has said no new decision will be made until its meeting in Vienna in 9 September. They discussed techniques of improving efficiency and sharing technology. The Aomori talks have heralded a full meeting of G8 leaders on Japan's northernmost Hokkaido island in July to take stock of the developments on global economic front.

Of course the most important issue confronting the future civilization, viz. the Climate Change, has remained focused as well, although the oil prices pushed it to sidelines temporarily. European and Japanese leaders at their annual summit in Tokyo have called for "ambitious and binding" targets for cutting greenhouse gas emissions. The G-8 economic club notionally agreed that industrialized nations would need to cut emissions by between 25% and 40% compared to 1990 levels by 2020. A G8 statement says curbing climate change will need mobilization of unprecedented investments and finance" mainly from the private sector. The top most global economic body has accepted that a Japanese plan to explore separate targets for different types of industry is "useful". Leaders do hope to take their arguments forward into the July G8 meeting again in Japan.   

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