(China Daily)
Updated: 2008-01-04 11:46

Crude oil briefly hit $100 a barrel for the first time on the first trading day of the new year, rapidly fulfilling one of the most widely-expected prophecies about the world economy.

Record high oil prices are a loud warning that entails global energy-saving actions.

Soaring oil prices will considerably add to uncertainties in global growth prospects, especially as the United States, the world's largest economy, has already been struggling to avoid recession in the face of a credit squeeze and a housing slide.

At present, it is far from sure if the oil price will continue to surge significantly before tipping the US economy into recession or the ongoing US slowdown will quickly ease demand and lead to a sharp fall in oil prices.

However, in spite of such divergency in the short to middle-term trend of oil prices, it has become all too clear that countries around the world must do their best to save every drop of oil now.

Even if production of oil can be further boosted through new investment and technology, it will be impossible to prevent global demand from outstripping supplies if worldwide efforts are not concerted to raise energy efficiency.

Various countries should make differential contributions in line with their conditions in the global campaign to save energy. In a sense, the ever-rising oil prices can be deemed as the drum the market beats for such actions.

For China, energy conservation has been made an unequivocal priority in its latest development strategy.

As the world's fastest-growing major economy, the country is fully aware of the potential impact of its expanding appetite for energy on the global market as well as the necessity to aggressively raise its energy efficiency to sustain economic growth.

In a bid to expedite change to the country's extensive growth model, the Chinese government has made it a top goal to cut energy consumption per unit of GDP by 20 percent between 2006 and 2010.

It is believed that the ongoing rise in international oil prices will eventually play into the hands of Chinese policymakers who are eager to goad domestic producers and consumers to use energy in a more efficient way.

A strict government control over energy prices has so far prevented hikes in international oil prices from swiftly inflating the domestic cost of production. To encourage energy conservation and punish those dragging their feet on raising their energy efficiency, it is urgent for the country to introduce a market-oriented energy pricing system.

During the course to relax control over energy prices, policymakers should carefully identify those underprivileged groups who are hit hard by rising energy costs and subsidize them properly and promptly.