Western Europe Truckers' Fuel Protest Spreads

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Monday September 11 7:40 PM ET Truckers' Fuel Protests Spread in Western Europe

By Gilles Castonguay

BRUSSELS (Reuters) - Fuel protests spread through western Europe on Monday, prompting EU president France to call for a meeting of transport ministers next week to consider harmonizing fuel prices and taxes.

Truckers in several countries blockaded cities and fuel depots as world oil prices edged still higher despite an OPEC pledge to boost production, and analysts warned of a possible shortage this Winter.

In Belgium, hailers brought Brussels traffic to a standstill for a second day, while British motorists started stockpiling fuel as refinery blockades caused thousands of filling stations to run dry.

German truckers, meanwhile, threatened to disrupt the country's transport network from Thursday unless the government offered relief from rising fuel costs. Irish lorry drivers vowed to take action from Friday unless there was a 20 percent cut in diesel duty.

Both the German and British governments insisted they would not follow the French example of giving in to demands for lower fuel taxes.

``We cannot and will not alter government policy on petrol through blockades and pickets -- that is not the way to make policy in Britain,'' Prime Minister Tony Blair said.

Irish Prime Minister Bertie Ahern has agreed to meet Irish truck drivers on Wednesday to hear their demands.

Belgian Transport Minister Isabelle Durant said on Monday her French counterpart Jean-Claude Gayssot had called for a meeting of European transport ministers for September 21.

France Gives In To Protesters

France, which currently holds the EU presidency, gave in to protesters' demands with a 15-percent fuel tax cut. Most blockades of French oil refineries and depots were lifted on Sunday, ending a week of protests that paralyzed the nation.

The protests against high taxes levied on petrol and diesel in western Europe have been sparked by rising crude oil prices.

Ministers from the Organization of Petroleum Exporting Countries (OPEC), meeting in Vienna over the weekend, decided to raise oil output by 800,000 barrels a day.

But world oil prices soared even higher on Monday, although they later fell back as Saudi Oil Minister Ali al-Naimi said OPEC wanted prices at $25 a barrel.

Brent blend crude, the world benchmark, stormed to $34.25 in mid-afternoon, within sight of last week's 10-year high of $34.60, before falling back to $33.61.

OPEC had been hoping its extra oil would quell the outcry over high energy bills amid worries that accelerated inflation could dent world economic growth.

But cartel ministers admitted on Monday that prices now could be running out of control.

``We are approaching a crisis of great proportions because oil production capacity is reaching its limit,'' said OPEC's president, Venezuelan Oil Minister Ali Rodriguez.

``I don't think prices are going to get there now but they could rise to $40 depending on the winter,'' he added.

``This just goes to show how little power OPEC really has over oil prices at the moment,'' said Gary Ross of New York's Petroleum Industry Research Associates.

``There's a feeling that whatever OPEC does, there's not going to be enough oil this winter,'' added Nigel Saperia of European trading house Glencore.

Traffic Snarled

In Brussels, defiant truck drivers vowed to continue their blockade after storming out of a meeting with Transport Minister Durant.

They said they would only move their vehicles, which remained parked across streets, hampering access to government buildings and European Union offices, when Durant reopened the dialogue.

The protest wrought havoc with traffic, forcing thousands to take detours to work or to leave their cars at home and take public transport.

The British Chambers of Commerce said protest was even more damaging to industry than high fuel prices and urged a temporary tax cut to end the crisis.

Thousands of UK filling stations have run out of key grades of petrol and diesel amid nationwide blockades at refineries, terminals and depots, and panic buying by motorists, oil firms said.

Britain's leading petrol retailer, Esso (NYSE:XOM - news), said over 300 of its 1,600 sites had run out of petrol and diesel.

BP Amoco (BP.L), Britain's second largest retailer, said that 40 percent of its petrol stations nationwide, or 600 out of 1,500 sites, had run out.

Prime Minister Blair had to scrap dinner plans on Monday after protesters blocked roads to the restaurant where he was to eat with Labor Party supporters in northern England.

German truckers and farmers blocked traffic in two towns in Chancellor Gerhard Schroeder's home state of Lower Saxony at the weekend, and the region's trucking group warned that those protests could mark the start of a ``forest fire.''

Handelsblatt newspaper said transport companies were considering whether to proceed with protests aimed at crippling road distribution networks throughout Germany from Thursday.

-- Rachel Gibson (rgibson@hotmail.com), September 11, 2000

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