Xi calls for better cooperation

By Brian Parkin  |   2008-6-23  |     NEWSPAPER EDITION

CHINESE Vice President Xi Jinping said better cooperation between oil producers and consumers is needed to lower energy prices that doubled in the last year and pose a risk to the global economy.

In a speech yesterday at an emergency oil conference in Saudi Arabia, Xi called on oil producers and consumers to draw up a common "energy security" plan to improve the reliability of supplies so that prices may return to a "reasonable level." He urged the summit participants to impose limits on speculators trading oil on global markets, according to Bloomberg News.

Oil touched a record US$139.89 a barrel on June 16, as investors bought commodities to hedge against a weakening US dollar and concern rose that demand is growing faster than supply.

Gasoline retail prices over US$4 a gallon in the United States are raising concerns the economy may enter into a recession. Crude oil for July delivery closed last Friday in New York trading at US$134.62 per barrel.

China on Friday raised gasoline prices 17 percent to 6,980 yuan (US$1,015) a metric ton and diesel was boosted 18 percent to 6,520 yuan.

China will pay 19.8 billion yuan (US$2.9 billion) in subsidies to help farmers, fishermen and public transport operators cope with higher costs.