Brown seeking 'new deal' on oil

Mr Brown was arriving in Saudi Arabia for a hastily-organised summit with the world's biggest oil-producing countries to discuss the soaring prices which have seen oil reach almost 140 US dollars a barrel.

Speaking at Heathrow before his departure, Mr Brown said he wanted the West to reduce its dependence on oil and oil-rich Opec states to invest in alternative energy sources such as wind, solar and nuclear.

Mr Brown said: "We are going through the third big oil shock. This is probably the most difficult one. It is hitting people's standard of living very heavily. There must be a new deal between the oil producers and consumers.

"I am going to make it absolutely clear that we are going to reduce our dependence on oil. I want the oil-producing countries also to diversify out of oil and I want us to get a more balanced energy market."

Asked why countries such as Saudi Arabia, which have made trillions of dollars of extra profit from the recent spike in prices, should invest in British nuclear power plants and green energy, Mr Brown said: "What's in it for them? They get the stability that is lacking in the oil markets and they can also bank on a non-oil future as well as an oil future.

"They have massive revenues for oil that ought to be invested in non-oil energy sources and I believe that we can, over time, get a new deal to bring the stability that every household, every business, everybody who goes to the petrol pumps is looking for."

On the eve of the summit of major oil-producing and consuming states, Saudi sources indicated that the world's largest oil exporter will increase production to a record 9.7 million barrels a day next month, to put downward pressure on prices, which have doubled to almost 140 US dollars a barrel over the past year.

But Mr Brown will tell the conference in Jeddah that he is not simply seeking the short-term fix of a boost in supply to cut prices at the pump, where British motorists are currently paying £1.20 for a litre of unleaded.

Instead, he will set out a four-point "New Deal" to help wean the industrialised world off expensive oil and allow Opec states to benefit from the move to more environmentally-friendly power sources. And he will urge the oil-rich countries of the Gulf to invest some of the three trillion dollar profits they have amassed during the current oil shock in alternative power production in Britain - including a new generation of nuclear plants.