30th Jul 2021

EU leaders unsure how to handle fuel crisis

  • The high cost of oil is beginning to have political consequences (Photo: European Commission)

Fuel price protests threaten to spread around Europe in the run-up to the weekend following earlier action in the UK, France and Bulgaria, with EU leaders uncertain how to respond to the unfolding crisis.

Dutch and French truckers have promised to cause disruption on roads on Thursday (29 May), while fishermen in Italy, Spain, Portugal, Belgium and Greece plan to picket ports and government buildings Friday, newswires report.

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On Wednesday, French fishermen eased port blockades, but farmers sealed off fuel depots near Frontignan and Toulouse, with riot police using tear gas to break the line. In Bulgaria, lorry and taxi drivers closed parts of Sofia to normal traffic.

The rocketing cost of petrol and diesel - up by 30 percent in France this year - is linked to record global oil prices and exasperated by the high levels of government taxation on fuel. In the UK, 65 percent of the price of petrol consists of tax.

"The global economy is facing the third great oil shock of recent decades," UK prime minister Gordon Brown said in a statement on Wednesday. "There is no easy answer to the global oil problem without a comprehensive international strategy."

Mr Brown called for oil to lead the agenda at G-8 talks in Japan in July and the Slovenian EU presidency has promised to discuss emergency fuel relief measures at the EU summit on 19 June.

Concrete ideas on how to respond to the problem have caused division in EU ranks so far, however.

French president Nicolas Sarkozy on a visit to Warsaw on Wednesday repeated his call for an EU-wide cut on fuel duties. "Should we really apply the same tax rate when the price of a barrel of oil has doubled in one year and tripled in three years?" he asked.

British daily The Guardian reports that London is planning to delay a planned 2p increase in fuel tax from October to next year in a move that would cost the UK budget €700 million.

But Mr Sarkozy's tax proposal has got a cold response from the European Commission and finance ministers from Austria, Italy and Belgium so far.

"During a period where prices are going up, you cannot really attempt to try to transfer the loss to other sectors within our own countries. What you can try to do is to try to use specific decisions targeted to each sector with very specific objectives," finance commissioner Joaquin Almunia said Wednesday.

"What will you do when prices fall again, reintroduce the tax? I'd like to hear the political discussions then," Austrian finance minister Wilhelm Molterer said, according to AFP.

Spanish, French and Italian agriculture ministers on Tuesday called on Brussels to raise the cap on state aid for the fisheries sector.

But the Netherlands and Portugal shot down the idea, with Portuguese farm minister Jaime Silva saying "short-term solutions are the most popular in political terms, but they have no lasting effect," AFP reports.


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