EU ministers press for lower oil prices

By Marcin Grajewski

MANCHESTER (Reuters) – The European Union urged
oil-producing countries and oil companies on Saturday to do
more to improve supplies as sky-high prices raise fuel and
power bills for homes and businesses, hitting economic growth.

The plea came in a written statement from a meeting of the
25 EU finance ministers in Manchester, where ministers also
said they wanted to see more efforts to cut oil usage in the
United States, the world’s biggest consumer.

“Ministers urge oil producing countries and companies and
consumers to recognize their common interest in ensuring
sufficient supplies of oil,” said the statement.

“They call on oil companies to increase investment in oil
exploration, production and refining capacity and alternative
energy services,” it said.

“They also call on countries and international institutions
to work to remove barriers and create a climate conducive to
investment throughout the supply chain.”

The statement came at the end of a two-day meeting which
was marked by mounting political irritation with the world’s
large oil companies who are making bumper profits while soaring
fuel costs hike energy bills for households and industry.

Ministers said inflation nevertheless remained contained,
unlike during the oil crises of the 1970s.

PUMP PRICE CUTS

Oil giants Total and BP bowed to the mounting pressure in
France by announcing cuts in prices at the petrol pump there,
following threats from Finance Minister Thierry Breton to slap
new taxes on profits..

It was not immediately clear whether there would price cuts
in other parts of Europe or if other oil companies would cut
their prices too.

The statement in Manchester did not single the United
States out but ministers said they wanted to call for more
efficient usage by a country renowned for big gas-guzzling
vehicles.

“We will use our G7 meetings in Washington in two weeks to
have a frank word with our American colleagues,” Luxembourg
Prime Minister Jean-Claude Juncker told reporters before the
meeting started.

The G7 — the United States, Japan, Germany, France, Italy,
Britain and Canada — meets in two weeks’ time in Washington.

Juncker says that if oil remained expensive in the fourth
quarter, economic growth in the 12-nation euro currency zone
year could be around 1.0 percent this year rather than the
previously expected 1.3 percent.

Oil prices, boosted to record highs of nearly $71 per
barrel by the damage inflicted on U.S. refineries and oil rigs
by hurricane Katrina, eased on Friday to around $64 per barrel
after the International Energy Agency began releasing reserves.

Total, which made profits of about 1.5 million euros an
hour in the first six months of this year, said it would cut
unleaded fuel prices by 3 euro cents per liter and diesel by
two cents.

“The oil sector players have a particular responsibility in
this domain because they are making exceptionally big profits,”
Juncker said.