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EU ministers press for lower oil prices

Posted on: Saturday, 10 September 2005, 06:38 CDT

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.

Source: REUTERS

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