Opec pressured over oil prices

Petrol is beginning to flow back into French pumps

Oil ministers from the Organisation of Petroleum Exporting Countries (Opec) are meeting for pivotal talks on boosting oil production amid an international outcry over soaring prices.

European governments should re-examine the tax structure on fuels in their countries

Saudi Oil Minister Ali al-Naimi

In the last week, the price of oil has hit a 10-year high of $34 per barrel.

Protests against the high price of fuel are coming to an end in France, where action by truckers and farmers brought the country to a virtual standstill.

Similar, though less widespread, protests are continuing in Britain.

European Union finance ministers on Saturday called for a boost in output to bring fuel prices down.

The shortages in France have caused long queues

"Ministers call on Opec to implement measures to ensure that market supplies are better adapted to the global economic situation," said a statement issued by EU finance ministers in Versailles, France.

Calls for decisive action from Opec have also come from US President Bill Clinton, UN Secretary-General Kofi Annan and the Asia-Pacific Economic Cooperation forum.

In the United States, fears and complaints have been growing about petrol prices in the Midwest and the availability of heating oil on the East Coast.

High oil prices increase inflation and restrict growth in America and Europe, who both import the majority of their oil supplies.

Saudis the key

Opec has indicated that it will raise production by at least 500,000 barrels a day.

But the BBC's economics correspondent at the talks in Vienna says it is thought the world's largest oil producer, Saudi Arabia, is thought to be calling for an increase of one million barrels a day.

US President Clinton met Saudi Arabian leaders earlier in the week and urged them to boost production to prevent a world recession.

Oil prices eased slightly on Friday as traders took profits ahead of the Opec meeting.

The price of a barrel of benchmark Brent crude fell to just under $33, after touching a high of $34.55 on Thursday.

Tax criticism

European governments are eager to deflect criticism that it is high levels of fuel taxation that have driven prices so high, and would like to see the initiative to lower prices shifted onto Opec.

Opec says it wants oil prices of around $25 a barrel, with a target band of between $22 and $28.

"Opec is going to do its part to lower the crude price to within the target band," Saudi Oil Minister Ali al-Naimi, said.

But he said that putting all the blame on Opec for high prices was misguided.

"Instead of putting pressure on Opec... different European governments should re-examine the tax structure on fuels in their countries."

Analysts say that some of Opec's other members are reluctant to increase production amid fears that an oil-surplus might be created causing prices to fall too steeply.