Finance ministers of the world's wealthiest nations sounded the alarm over the cost of energy yesterday and urged greater international co-operation to ensure stable supplies.

Ministers from the Group of Eight industrialised countries said in a communique that global economic expansion was strong but at risk because of high and volatile energy prices.

A communique from the ministers said more work was needed to co-ordinate energy policy and promote price stability through a properly functioning market. The meeting in icy Moscow marked Russia's first presidency of the G8 club - which also includes the United States, Japan, Canada, Germany, France, Britain and Italy - and Putin has made energy security a central theme for 2006.

For some of Putin's G8 partners, Russia is part of the problem as well as the solution.

Russia is one of the world's biggest oil and gas suppliers but a recent row with Ukraine, in which it closed the gas taps, has made other G8 countries uneasy because the spat disrupted supplies in countries such as Hungary, Austria and Italy too.

International Monetary Fund managing director Rodrigo Rato, present at the talks, said supply problems increasingly seemed to be part of the problem, and not just surging demand from countries such as China. Oil, at more than $60 a barrel, is roughly twice as dear as it was two years ago, though still lower than the records it hit after the Arab oil embargo, Iranian revolution and Iran-Iraq war in the mid-1970s and early 1980s.

The diplomatically worded G8 communique made no reference to the Russian gas supply spat but officials said they were keen to see the Kremlin allow more foreign investment in its energy sector and loosen the grip of the monopoly supplier Gazprom.

The standoff with oil-rich Iran over uranium enrichment has also served as a reminder of how vulnerable supplies can be.

Independent journalism costs money. Support Times of Malta for the price of a coffee.

Support Us