DJ G8:IMF Rato: Energy Prices Remain Threat To Global Growth
MOSCOW (Dow Jones)--High oil prices remain a threat to global economic growth as concerns over future supply mount, the head of the International Monetary Fund said Saturday.
Speaking to reporters after a meeting of finance ministers from the Group of Eight leading nations, IMF Managing Director Rodrigo de Rato said that limits to supply are now playing a greater role in keeping oil prices high.
"We are seeing more and more signs the increase in the price of oil isn't only related to demand," he said. "We are facing more and more supply constraints...which could produce macroeconomic disturbances we haven't seen yet."
According to the International Energy Agency, there were losses of crude oil supply amounting to some 450,000 barrels a day in January.
However, it said increased production from other sources meant that total global oil supply only fell by 135,000 barrels a day in January from December.
Instability in Nigeria and the nuclear row involving Iran have increased concerns about the level of global oil supply over the coming months.
Rato also said that raising taxes on energy could help reduce oil consumption while boosting government revenues.
"Consumption taxes on energy can play a healthy role both on revenues and on the consumption of energy," Rato said.
Although he didn't explicitly refer to the U.S. as a country that might benefit from higher energy taxes, by international standards U.S. energy taxes are relatively low, and the government is running a large budget deficit.
-By Elizabeth Price, Dow Jones Newswires, +1 202 549 9196, elizabeth.price@dowjones.com
(END) Dow Jones Newswires
February 11, 2006 06:12 ET (11:12 GMT)
Copyright (c) 2006 Dow Jones & Company, Inc.- - 06 12 AM EST 02-11-06 |
