OSAKA, June 14: Finance ministers from the Group of Eight industrialised nations urged oil producers on Saturday to boost output to help stabilise record-high oil and food prices, describing the situation as a serious threat to global economic growth.

The world economy now faces ‘headwinds’ because of the recent rise in prices, the G8 ministers said in a joint statement at the conclusion of two days of talks in Osaka in western Japan.

“Elevated commodity prices, especially of oil and food, pose a serious challenge to stable growth worldwide, have serious implications for the most vulnerable and may increase global inflationary pressure,” the statement said.

The fundamental factor driving oil prices is the imbalance between rising global demand and supply constraints, the ministers said, adding that geopolitical and financial factors also played a role – a reflection of some ministers’ view that speculative trading in oil markets was pushing up prices.

US Treasury Secretary Henry Paulson insisted that the problem stemmed primarily from tight supplies and warned against embracing ‘short-term solutions’.

Noting that oil prices have jumped fivefold since 2002, Paulson in a statement called upon countries to let markets work and reduce reliance on subsidies.

“I think there’s a danger if people say, ‘Oh, it’s the speculators,’” Paulson told reporters after meeting with his G8 counterparts.

Echoing Paulson, British Chancellor Alistair Darling said focusing too heavily on speculators distracted from the main issue. “What we need to do, as a matter of urgency, is to increase supplies,” he said.

But other G8 members, particularly France, Germany and Italy, place greater blame on speculators.

Italian Finance Minister Giulio Tremonti said ‘enormous’ speculation was behind the rising energy prices. He proposed an increase in margins needed to trade oil futures contracts.

Japanese Finance Minister Fukushiro Nukaga, chair of the G8 meeting, downplayed any differences among members, saying they simply “don’t yet have a full understanding of what is actually happening.”—AP