FINANCE MINISTERS from the G8, meeting in Japan, have warned that soaring food and energy prices mean the global economy faces significant “headwinds”.

However, ahead of a meeting between oil consuming and producing nations in Saudi Arabia next weekend, they were split on the cause of the surge in crude prices to nearly $140 a barrel earlier this month.

Alistair Darling, the chancellor, refused to pin the blame on speculators for pushing up the price, saying that the pressing need was for oil-producing nations to increase output.

“It is sometimes difficult to distinguish between an airline that may hedge its fuel price, which is perfectly sensible planning, and someone who is speculating or even gambling on the price of oil,” he said.

Hank Paulson, the US Treasury secretary, agreed. “At its heart, this run-up in price reflects long-term trends in global supply and demand and strong economic growth coinciding with a period of minimal investment in oil production,” he said.

In contrast, several EU members of the G8 blamed the high price on speculators and urged they be curbed.

“This global, massive and durable surge has facets that are inexplicable,” said Christine Lagarde, the French finance minister.

Giulio Tremonti, Italy’s finance minister, said it was imperative that countries cooperated to “fight speculation” and urged higher deposits for investors trading in commodity markets. This proposal was not accepted, though the G8 did agree to an International Monetary Fund investigation into oil prices.

Darling and Paulson, apart from sensitivity over the fact that most oil is traded in London and New York, appeared determined not to dilute the message that the fundamental cause of high prices is that oil producers have been restricting supplies.

The G8 meeting warned the tough times would not go away. “The world economy continues to face uncertainty,” it said in a formal statement. “Further declines in housing prices in the US and greater strains in the financial markets may adversely affect the global outlook. Elevated commodity prices, especially of oil and food, pose a serious challenge.”

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