High oil, diesel prices cause protests in Europe

The soaring price of diesel oil, which is jeopardizing fishermen's already meager profits, has led to protests in France that are spreading to Spain, Portugal, and Italy.

Doris Leblond
OGJ Correspondent

PARIS, May 29 -- The soaring price of diesel oil, which is jeopardizing fishermen's already meager profits, has led to protests in France that are spreading to Spain, Portugal, and Italy. Truckers and farmers are joining the protest movement.

In France, the protest actions are fluctuating and sporadic. Total spokeswoman Christine de Champeaux told OGJ that product depots and ports are blocked for short periods and that demonstrations occur irregularly and in varied areas.

"Refineries, she said, must take different measures to supply service stations or see that refineries are supplied despite blocked ports. But, so far, the protests have been a hindrance rather than doing actual harm to oil companies." Protests are nevertheless being monitored on a daily basis.

Proposals
French President Nicolas Sarkozy said he is standing by his request that the European Union lower the value-added taxes (VAT) on oil, a decision that requires unanimous approval of the 27 EU member countries. France's Finance and Economy Minister Christine Lagarde said May 29 that the EU should be more flexible in adjusting its policies to "exceptional circumstances," including the current soaring price of oil.

Lagarde also asked her colleagues within the Group of Seven richest countries to discuss the issue of high oil prices "among consumer nations," the outcome to be then presented to oil-producing countries.

France's Agriculture and Fisheries Minister Michel Barnier would like a "direct European subsidy" to keep Europe's fishing industry alive. He said at a meeting in Brussels that the EU should lift the ceiling on aid that a country can provide without referring to the EU Commission. It currently allows €30,000/fishery. Many countries, including Italy, consider this too low.

However, there is no consensus in Brussels on this proposal; governments fear that such a subsidy would have a domino effect on other economic areas also hit by high oil prices.

Meanwhile regarding production increases, Total CEO Christophe de Margerie confirmed to OGJ that he had indeed said on a recent visit to Angola accompanying President Nicolas Sarkozy that he "hoped that in 2-3 years" Total would become "the leading operator on the Angolan market" with its production reaching 700,000 b/d, up from the current 290,000 b/d.

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