AOMORI, June 7, 2008 (AFP) – The United States, Japan, China, India and South Korea called here Saturday in a joint statement for a “gradual” end to fuel price subsidies despite a spike in crude oil costs. “We recognise that, moving forward, phased and gradual withdrawal of price subsidies for conventional energies is desirable,” officials from the five nations said in a joint statement after talks in Japan.
They said that subsidies “should be replaced wherever possible by better targeted policies for intended beneficiaries.”
Oil prices, which have soared five-fold since 2003, posted their highest ever one-day gain of 10.75 dollars to close at a new record of 138.54 dollars in New York.
Developing economies tend to heavily subsidise fuel costs in a bid to ease the burden on the poorest members of society.
India and Indonesia have recently been forced to hike prices amid soaring global crude oil costs, triggering large anti-government demonstrations in the two countries.
India’s oil minister, Murli Deora, cancelled his attendance at the talks in Japan at the last minute due to “domestic reasons,” a Japanese official said on condition of anonymity.
India was represented by its