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Wednesday 6 September 2000

French petrol rationed as blockades bite

By Patrick Bishop in Paris Telegraph J

LARGE parts of France were coming to a standstill last night as a second day of blockades of oil refineries and fuel depots prompted petrol rationing. Taxi drivers and truckers blockade a petrol depot in Nantes While supplies dwindled, talks between haulage representatives and the Transport Minister, Jean-Claude Gayssot, appeared to be making slow progress, despite a government offer of a 10 per cent cut in fuel taxes.

The scale of the chaos caused by the drivers' blockade in protest at high prices seems to have persuaded hauliers to hold out for the full 20 per cent reduction they are demanding. The oil giant Total said nearly three-quarters of its 6,000 outlets in France were closed.

Prefects in several areas announced limits on the amount of fuel motorists could buy in the filling stations still operating. In Belfort, eastern France, drivers were rationed to about £10 worth each. A number of outlets were requisitioned by the authorities to ensure supplies to emergency vehicles.

Motorists in border areas drove into neighbouring countries to fill up. Attempts to close airports had little success. Many planes were filling up outside France. The protest is being led by haulage employers who expect the government to protect them from the commercial blow dealt by the highest oil price for 10 years.

Several of the large unions have dissociated themselves from the action, saying that any benefits wrung from the government will not be passed on to workers. Despite the government's stated desire for a quick solution - and its offer to cut taxes, reducing the fuel bill of each lorry by about £1,000 a year - the crisis seemed set to deepen today.

The hauliers stand at the head of a queue of groups clamouring for compensation. The government knows that its concessions - first to the fishermen who were rewarded last week for blocking ports around France - have whetted the appetites of farmers, taxi drivers and coach drivers, all of whom say they are being beggared by fuel costs.

M Gayssot, a Communist member of the Socialist-led ruling coalition, called yesterday for the European Union and European Central Bank to put pressure on oil producers to lower their prices, currently $30 a barrel. The disruption comes at a time when France is presenting itself as a model of how a successful economy can maintain high levels of social protection while maintaining its edge in world markets.

The latest troubles will add to the problems that Lionel Jospin, the Prime Minister, faces after the summer break. He is already on the defensive over his plan for greater autonomy for Corsica. Opposition inside his government led to the resignation of the Interior Minister, Jean-Pierre Chevnement, last week.

Mr Chevnement intends to use his new freedom not only to harry the government over the Corsica plan, which he says will undermine the integrity of the republic, but to attack M Jospin for the hesitant, business-friendly course that he and his Finance Minister, Laurent Fabius, have set.

The combination of Corsica, high taxes and rising fuel bills have damaged M Jospin's standing. His poll ratings have fallen by five per cent in the past month. This will come as a particular blow to the prime minister, who is already effectively campaigning for the 2002 presidential election in which he is expected to represent the Left against the incumbent, Jacques Chirac.

-- Cash (Cash@andcarry.com), September 05, 2000

Answers

My husband owned a trucking company for 30 years so I can fully understand how the price of fuel can devistate a trucker, especially an independent. However, I don't see how anyone can have the expectations that a gov't can go to OPEC and demand lower prices. OPEC is finally realizing its grip of power, and while I don't like it, I realize were the US sitting on all that oil we would do the same. My first reaction to this article is that the same thing could happen here. But on further reflection, I don't see it. I see the small truckers just silently going out of business. We are beginning to see lots of rigs parked in front yards with For Sale signs on them and the truck places all have filled up with consignments. The only guy that stands a chance is the guy with a truck that is fully paid for and just had an overhaul and all new tires put on and paid for. He MIGHT make it....at least he will stay on the road longer than the ones who have truck payments to make. Taz

-- Taz (jharal2197@aol.com), September 06, 2000.

Top World News Wed, 06 Sep 2000, 2:40pm EDT

France's Trucker Blockade Sparks Fear of Protests Elsewhere By Katrin Bennhold and Simon Packard

Paris, Sept. 6 (Bloomberg) -- French farmers and truckers extended to a fourth day an oil-refinery blockade protesting soaring fuel prices, leaving drivers begging for gasoline and raising fears that other European countries also might see unrest in coming weeks.

Two of the three principal trucking-company associations refused today to accept the latest government proposals to cut fuel taxes to offset higher prices. The blockade has created shortages in 25 percent of stations on highways and 70 percent on smaller roads, said Jean-Paul Vettier, head of refining and marketing at Total Fina Elf SA.

British and German officials, mindful of previous trade- disrupting blockades of ports and roads by French truckers, worried that the proposed French tax concessions would put pressure on them to do the same.

``Once again, Britain is held at ransom by an internal French dispute,'' said British Transport Minister John Prescott.

Belgian and Spanish truckers were considering joining their French counterparts in blocking highways to demand government protection against rising diesel prices. Repsol-YPF SA, Spain's biggest oil company, could face a one-day boycott by farmers, truckers and taxi drivers, on September 15.

Oil prices, which tripled over the past 18 months, hit a 10- year high today. A barrel of Europe's benchmark crude oil cost as much as $33.55. That boosts production costs across the economy and hurts transport companies and farmers, who are particularly dependent on fuel.

Paris taxi drivers are planning to strike Thursday, and French farmers pledged today to remain on the barricades even if truckers reached a tax deal.

``If you figure 5,000 liters of gas per year, the price increase means I'm earning 10,000 francs ($1,344) less,'' said one taxi driver.

Pressure on OPEC

In many European countries, fuel taxes represent over 70 percent of the price of gasoline. In Brussels, however, EU Transport and Energy Commissioner Loyola de Palacio said fuel-tax cuts would be the wrong solution to rising oil prices and might be illegal under EU anti-subsidy laws.

EU countries must instead work together to pressure the Organization of Petroleum Exporting Countries to stabilize prices nearer to their market level, said Palacio, adding ``we need an increase in production.''

OPEC will meet in Vienna this weekend and the EU's finance ministers will discuss measures to deal with high oil prices at a scheduled get-together in Versailles beginning Friday.

That's getting a little late for Gerhard Michaele, who doesn't have enough gas to get home to Saarbrucken, Germany, from his vacation cottage in Najac, in southwestern France. He was supposed to return home to run his meat business Monday, but is high and dry.

``I've got a full tank, but it's not enough to get me back, as it's an 11-hour drive,'' he said. Michaele said all the local gas stations in his area are either shut already or refusing gas to all but the most faithful customers. ``I'm stuck. I don't dare head off, for fear of getting stranded.''

Longer Gas Lines

While French consumers tend to be supportive of labor actions, even those that inconvenience them, this was one starting to hurt.

``The lines at the filling stations are getting longer and longer,'' said Philippe Martin, president of the Conseil de Gers, a predominantly rural region in the southwest of France. ``In a region like ours, where there isn't so much public transport, it's a serious problem. The new term is beginning and we have a duty to get children to school.''

One of the three French trucking associations accepted a tax cut of 35 centimes per liter this year. Next year the cut would be reduced to 25 centimes. Prime Minister Lionel Jospin said late today that the government would ``go no further,'' Agence France Presse reported.

The offer ``goes in the right direction but has been judged insufficient,'' the largest association, the National Federation of Road Transporters FNTR said in a statement. The FNTR did not show up for discussions at the transport ministry today.

What began as a protest among French fishermen blocking ports last week has escalated into a series of nationwide disruptions by diverse interests hurt by the rising price of oil. It is undermining the thrust of a $16.12-billion tax cut package presented by Jospin's government that sought to boost Jospin's chances in the 2002 elections.

``They cut car-registration taxes, but what they are raising is much bigger. It's malicious,'' said Paris taxi driver Jose Penafria.

Fear of Concessions

In Germany, no concessions have yet been offered, but officials fear they will be demanded if France grants them.

``If the French blockaders get what they want, the chances of copy-cat action rise,'' Richard Schild, a spokesman for the German ministry of transport and construction, adding that the concessions offered by the French government today ``didn't help''.

In Belgium, officials will wait for the result of the OPEC meeting before considering any possible tax concessions, a government spokesman said.

``People are very unhappy. Prices go up almost every other day,' he said.

Meanwhile opposition parties in Europe are capitalizing on high oil prices to call for lower gasoline taxes. The Christian Democrats in Germany today blamed so-called eco-tax imposed by the Social Democrat's coalition government headed by Chancellor Gerhard Schroeder for higher transport and heating costs.

The companies themselves say they want to see prices lower. ``We would like prices to go down, ''said Thierry Desmarest, chief executive of Total Fina Elf, the fourth-largest publicly traded oil company. ``It's not good for economic development and I understand perfectly well the anger of some of our customers,'' he said.

http://quote.bloomberg.com/fgcgi.cgi?ptitle=Top%20World%20News&s1=blk& tp=ad_topright_topworld&T=markets_bfgcgi_content99.ht&s2=blk&bt=blk&s= AObZqZhWNRnJhbmNl

-- Cave Man (caves@are.us), September 06, 2000.