Leading nations should apply a blowtorch to the crude oil cartel OPEC, Prime Minister Kevin Rudd says.
Mr Rudd admitted the only way petrol prices could be cut significantly was for OPEC - the Organisation of Petroleum Exporting Countries - to up supply.
He suggested the Group of Eight (G8) meeting scheduled for Japan next month would be the best platform.
"OPEC need to open the production lines to a greater extent, increase global oil supply," Mr Rudd told Network Ten.
"They've done it a bit in response to representations from (US) President (George W) Bush.
"The G8 provides an opportunity to apply the blowtorch to the OPEC organisation and it's time that happened."
Mr Rudd's call comes as the G8 nations - Canada, France, Germany, Italy, Japan, Russia, Britain and the United States - met with China, India and South Korea amid deepening concern about record oil prices.
Oil prices, which have soared five-fold since 2003, posted their highest ever one-day gain of $US10.75 on Friday to close at a new record of $US138.54 in New York.
The rise followed hawkish remarks by an Israeli official who inferred his country would attack Iran if it doesn't abandon its nuclear program.
Iran is the fourth largest crude exporter and the Islamic republic controls the Strait of Hormuz where roughly two-fifths of all seaborne traded oil passes through.
At the G8 plus meeting in Aomori, a hub of Japan's nuclear energy industry 600km north of Tokyo, the major economies put blame on developing countries that subsidise fuel to ease the burden of their poor, which keeps up demand for oil and thus keeps up prices.
China and India have conceded it would be good to "progressively" eliminate these subsidies, but ruled out moving quickly on any such initiative.
Russian President Dmitry Medvedev, meanwhile, pointed the finger at the United States, saying it was "at the origin of the (financial) crisis".
US economist Joseph Stiglize, a Nobel laureate in economics, made similar accusations, asserting the US war in Iraq was a catalyst for the current woes.
"The oil crisis is linked to the situation with the war in Iraq.
"The subprime crisis, a consequence of war and the price rise in the barrel (of crude).
"The food crisis, thanks to the boom in biofuels, also results from the oil crisis," he said in comments in the French paper Liberation.
Front page
RSS Feed