King Abdullah called on the World Bank to organise a meeting for donor nations to discuss the initiative and help bring it online.
In his opening speech to conference delegates, King Abdullah also called on the Ministerial Council of the Opec Fund for International Development (Ofid) to meet and approve a parallel programme of $1bn.
The king also announced the kingdom’s readiness to finance the two programmes, within an agreed framework.
He announced the allocation of $500m in soft loans to help poor countries cope with high oil prices through the Saudi Development Fund, to finance energy projects.
The king said that the country’s policy since the establishment of Opec has been based on adopting a fair price for petroleum that is beneficial to both the producers and the consumers.
‘Starting from this policy, we have been allocating a great part of our income for the assistance development, and in the last few months we have increased our daily production of petroleum from nine million barrels to 9,700,000 barrels and we are ready to meet any additional requirements in the future’, the king said.
He stressed that a group of elements was responsible for the quick and unjustified increase of petroleum prices.
They include the frivolity of the speculators in the market; the increase of consumption in a number of rising economies; and increasing taxes on petroleum in a number of consuming countries.
Saudi Arabia intends to invest $129bn in the energy sector in the coming five years according to Saudi Oil Minister Ali Al-Naimi, who added that ‘the current status of oil markets doesn’t please anyone and that things are not in the interest of either consumers or producers’.
Al Naimi noted that besides new factors affecting energy consumption including changes in vehicle purchase, buying cars which consume less fuel, and alternative fuel systems, focusing on supply would not curb rising oil prices.
Saudi’s oil minister believes that there is no correlation between supply and demand on the one side and price behaviour and fluctuation on the other, adding that industry basics are not to be blamed for the increase in oil prices.
He indicated that there are other factors which the industry has no impact on, including global financial market trends and the weakness of stocks which compells investors to direct their money to oil.
Al Naimi indicated that there is a strong relationship between the increasing future oil trades at Nimex and rising prices, adding that the lack of monitoring, organisation and speculation reports have aggravated the situation.
Al Naimi welcomed the agreement signed between US Commodity Futures Trading Commission and the Securities and Exchange Commission which will extend monitoring to future deals on Europe.
Wednesday, July 2- 2008 @ 11:10 UAE local time (GMT+4) Replication or redistribution in whole or in part is expressly prohibited without the prior written consent of Mediaquest FZ LLC.