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Barely a day after Prime Minister Manmohan Singh called for the creation of a global forum of oil producers and consumers, where they could together work out modalities to introduce greater element of stability in global fuel prices, the G8 nations have proposed holding an energy forum to focus on energy efficiency and new technologies, which could contribute to dialogue between producers and consumers.
On Tuesday, leaders of G-8 nations met in Hokkaido in northern Japan to take stock of the world's economy, soaring global oil prices and energy security, food inflation and the state of global financial institutions, and expressed deep concern at the sharp rise in oil prices that pose significant risks to global growth.
Earlier, speaking to journalists on board Air India One on Monday, while on his way to the G-8 Summit, Dr Singh had said that there is a need to create a forum of the world's oil producing and consuming nations, like India and China. He had also called for transparency in the manner in which the world's major oil producers and international financial institutions operated so that the scourge of speculation could not hold the world to ransom.
The prime minister had also slammed international financial institutions and the world's wealthiest nations for not doing enough to curb the rising prices of oil and food
He called upon the international financial institutions to pool their wisdom, knowledge, and experience to educate the world as to what is the principal cause for spiraling oil tags. He said that such a situation creates instability and volatility, and neither situation is in the interest of producers or consumers.
However, the leaders of the world's wealthiest economies did not come up with any tangible solutions to solve the problem other than suggesting an increase in the production and refining capacities in the short term, and urging oil producers to ensure a transparent and stable investment environment conducive to increasing the production capacity needed to meet the burgeoning global demand. They also said that it was important to make further efforts to improve energy efficiency as well as pursue energy diversification.
G-8 leaders said that greater transparency would lead to better-functioning energy markets and would thus better create balance between supply and demand, and therefore it was necessary to improve collection and timely reporting of market data on oil and develop shared analysis of oil market trends and outlook. The G-8 has strongly supported the Joint Oil Data Initiative as a significant contribution in the efforts for information sharing including on oil stocks among energy producers and consumers.
The leaders of the world's most industrialised states are set to meet with the leaders of India, China, Brazil, Mexico and South Africa on Wednesday to discuss global economy, food and oil prices, climate change, globalisation and trade and investment issues.
G-8 leaders - Japan, the United States, Canada, Russia, Britain, Germany, France and Italy - said that they remained positive about the long-term resilience of the world's economies - especially the emerging market economies - but cautioned that the globe is facing uncertainty and downside risks still persist.
They agreed that elevated commodity prices, especially of oil and food, pose a serious challenge to stable growth worldwide and have serious implications for the impoverished, and increase global inflationary pressure. The leaders pledged that the G-8 is determined to continuously take appropriate actions, individually and collectively, to ensure stability and growth in our economies.
Mindful of the inter-related nature of the issues surrounding the world economy, G-8 leaders said that they were committed to promoting a smooth adjustment of global imbalances through sound macroeconomic management and structural policies in G-8 nations, emerging economies - like India and China - and oil producing countries.
The G-8 remains strongly committed to globalisation and open markets 'for the benefit of our citizens and global growth, while at the same time addressing various political, economic and social challenges for extending globalisation's benefits to all.
The leaders said, however, said that they would resist 'protectionist pressures against international trade and investment in all its manifestations.'