International Energy Agency (IEA) has asked India to eliminate fuel subsidies so as to

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cool the spurting demand.

"When we see the situation in the US, high prices have certainly slowed down demand and it could happen to other countries like India," IEA Executive Director Nuvuo Tanaka told reporters here.

IEA advocated India removing price controls on petrol, diesel, LPG and kerosene so that demand is moderated.

"What is necessary is to have a policy to phase out price control and subsidies," he said, adding he had met Petroleum Minister Murli Deora yesterday and had pressed for removal of subsidies.

India has not allowed state-run companies to raise fuel prices in step with rise in global oil prices and has been using oil bonds and a small amount from the Union Budget to subsidise fuel prices.

Tanaka advocated India becoming a member of the IEA so that the agency can make realistic projection of global oil demand and harmonise energy policy.

IEA felt the current price of USD 103 per barrel was high and have put pressure on economies worldwide.