Inflation has taken a huge leap in last few months and this is evidential from the steep increase in the oil prices leading to worldwide crisis. Maximum business meetings happening round the globe are continuously discussing to find the solution to this problem. Recently concluded the Group of Eight meeting or popularly known as G8 meeting too discussed the same issue.
The Group of Eight (G8) Organization met for two days after noticing a record one-day jump in crude oil to $139 a barrel. Apart from this efficiency, shared technology, and the promotion of alternative power sources were too extensively discussed. However, the major disagreements were surfaced around fuel subsidies, which the US and others feel have helped boost prices. Meeting took place in Aomori, on the northern edge of Japan's main Honshu island. Some of the business executives even called for an increase in oil production to push prices down.
They also emphasized on the fact that various Western countries should come forward to help developing nations reduce the environmental impact of their energy use. As per the stats, the United States, China, Japan, India, and South Korea are five key energy-consuming nations. They all called on oil producers to increase output so that the soaring prices could be controlled. Despite all the brainstorming and thought-process, the Organization of Petroleum Exporting Countries or OPEC said that no new decision will be taken until its meeting in Vienna on 9th September gets over. It was more surprising to know that the US is struggling economically, as they are significant engine in world economic activity.
The only positive solution that came into light was to apply blowtorch to OPEC to urge the cartel to increase production. Furthermore, many business executives even agreed that on other issues such as developing clean energy technologies, improving efficiency, and on better cooperation in strategic oil stocks. Despite of all these positive notes sharp differences emerged on fuel subsidies. Some of the members felt that the subsidies in China and India had helped drive demand and so increase prices. They also said that heavy fuel subsidies are being used throughout the developing world to try to ease the burden on the poorest in society.
Amidst this discussion India insisted there is no agreement to remove the subsidies altogether. India also stated that the country is not ready to move to a position wherein the market decides the price its citizens should pay for oil. Sharing the same lines, China also made clear that it had no time frame for moving towards lower subsidies.
Sensing the current trend, it is judged that even quick action decided at the Aomori talks might not bring immediate benefits and it will take a long time to accomplish. Some of the analysts even suggested that prices might reach as high as $200 a barrel during the next 18 months. All we can say that get ready for price hike in next coming weeks and months.