Europeans Broadsided by Gas Prices The Associated Press, Fri 8 Sep 2000 Email this story to a friend

FRANKFURT, Germany  European motorists are clamoring for relief at the pump as gas prices in the region soar on the backs of a currency that keeps losing its value and governments that are hooked on fuel taxes.

Europeans have long been accustomed to paying as much as four times what Americans shell out for a tank of gas, due to fuel taxes that can add a staggering 80 percent to the retail gas price in the region.

Now they are getting hit with a double whammy as the euro, the common currency used in 11 European nations, tumbles to new lows, making gas that much more expensive. And they don't like it.

The backlash peaked this week in France, where nationwide protests had truckers blockading fuel depots, taxi drivers disrupting traffic and farmers blocking freight access to the Channel Tunnel.

``This fuel blockade has really screwed things up,'' said U.S. tourist Bob Butler. ``I couldn't even catch a train from Cannes to Monaco today.''

Long lines formed at gas stations in Germany near the French border, where angry French motorists flocked after their own pumps ran dry. They even got a slight break: German gas is a few cents cheaper than the French average of $3.81 per gallon.

Following the lead of the French demonstrators, about 150 British farmers and truck drivers blockaded the entrance to a Shell Oil refinery in northwest England early Friday to protest the high cost of fuel.

The Automobile Association of Britain says British gasoline prices have more than doubled in the last decade and are among the highest in the world.

``We have decided to follow our counterparts in France,'' David Handley, chairman for Farmers for Action UK, told the British Broadcasting Corp. ``We've negotiated and talked as we've been asked to do and no one's listening to us. We've had enough.''

According to the Automobile Association of Britain, the average price for a gallon of unleaded gasoline in Britain this month is $4.02. But that's topped by pump prices in Finland at $4.18 a gallon and Norway, which claims the dubious honor of having the continent's highest prices at $4.30 a gallon  even though it's a big oil-producing country itself.

Britain is followed by the Netherlands, France, Belgium and Italy. Spain bottomed out the list, with a gallon of gas costing $2.79.

But even Spain erupted in a fuel boycott when the National Union of Fuel Consumers, an umbrella group of 500,000 fishermen and agriculture and transport workers, urged people to stop filling up at Repsol service stations in an attempt to force Spain's largest oil company to lower prices.

Taxi drivers in Greece were also threatening a strike.

All that makes U.S. drivers look silly for complaining about an average price of just $1.54 a gallon.

Chalk up the difference to taxes.

Nearly 76 percent of the pump price in Britain is lumped on by the government. And even in Portugal, the continent's least taxed motorists still shoulder a gas price that's 47 percent tax. In the United States, by contrast, only about 24 percent of each gas purchase goes to the government.

That's partially because European governments have grown increasingly reliant on gas taxes, which feed an ever-increasing slice of annual budgets as more people become dependent on their cars, for pleasure as much as for work.

In Britain, gas taxes account for 6 percent of all government revenues. Germany recently nailed drivers with a new ecology tax, which adds a few cents to each liter of gasoline.

The Polish government has so far been one of the few to cave in to popular pressure for relief. It said Thursday it would ax import duties on gasoline and other liquid fuels on Sept. 10.

Matters are only made worse by the euro, which has lost nearly 4 1/2 percent of its purchasing value in just the last week as the currency plunges against the dollar. That's a problem because oil  the raw material for gasoline  is primarily an import priced in dollars.

Oil prices have more than tripled since hitting a 12-year low of less than $11 a barrel in December 1998, before the Organization of Petroleum Exporting Countries slashed production to force prices higher.

Members of OPEC are scheduled to meet in Vienna on Sunday to discuss recent developments in the oil markets, including the sharp increase in prices. They are expected to approve an additional production of 500,000 barrels a day, an amount that experts say is not enough to meet heavy world demand.

Spain's secretary of state for the economy, Jose Folgado, typified many on the continent when he said Thursday that it's OPEC's responsibility to boost oil output and spare national governments the financial burden of lowering fuel costs.

``Any reduction of taxes directly related to energy is sending the wrong message to OPEC,'' Folgado said.

http://www.worldgas.com/?action=display&article=3441722&template=gas/mini.txt&index=recent

-- Martin Thompson (mthom1927@aol.com), September 08, 2000