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European governments ponder petrol price problems


European governments ponder petrol price problems


With protests planned around Europe against high fuel prices, governments are seeking ways to help hard-hit businesses such as hauliers and farmers. In Britain there has been panic buying in some places by motorists frightened that blockades will cause shortages. And French President Jacques Chirac has demanded energy companies which are reaping bumper profits.. make deeper cuts in fuel prices.

The oil producers in OPEC countries say they are already pumping near capacity and the problem is a lack of refining capacity. But British finance minister Gordon Brown thinks otherwise. He said: “The first action we must take is to tackle the cause of this problem, ensuring concerted global action is taken to bring down world oil prices and to stabilise oil markets for the long term. Because this is, at root, a problem of demand outstripping supply, OPEC must respond at its meeting on 19 September to rising demand by raising production to meet rising demand.” The reality is that European governments rely on the money from fuel taxes. On average, 68% of the cost of each litre is tax. Less than a third goes to the producers and refiners. The governments want to demonstrate to voters that they care, but they do not want to cut taxes and deprive themselves of a major source of income. For people like farmer Jean-Michel Heurtaux in Pas de Calais in northern France life is getting more difficult. He said: “Because of these price rises, my fuel bill for this year is going to be 3,600 euros higher than it was last year. That means my income is going to be 3,600 euros less.” The 25 European Union governments recently collectively agreed not to offer blanket reductions in fuel taxes, preferring smaller, more targeted aid packages.
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