PARIS, France - It appears that the rest of the world isn't insulated from the impact of high fuel prices, either.On Sept. 9, France's Socialist government felt it had no choice but to give in to the ...
PARIS, France – It appears that the rest of the world isn’t insulated from the impact of high fuel prices, either.
On Sept. 9, France’s Socialist government felt it had no choice but to give in to the demands of protesting truckers and taxi drivers, who were angered about the lashing they’d been taking whenever they filled up their vehicles. The price of diesel was rising steeply as the going price for crude oil on the world market reached aboveUS $30 a barrel.
The protesters couldn’t target OPEC, the Organization for Petroleum Exporting Countries, which controls much of the continent’s oil supply, so they set their sights closer to home.
The protests snarled city streets and slowed the country down to a crawl. However, instead of the wider population getting angry at the protesters, they sided with them. The French government gave in, agreeing to cut diesel taxes by about US $400 million over two years.
On Sept.10, OPEC buckled to international pressure, agreeing to boost crude oil production by three per cent, or about 800,000 barrels a day, in an attempt to lower the price for the black gold by increasing its supply. But the people who play the stock market’s resource sector didn’t think it was enough, and, fearing renewed problems in the Middle East, on Sept. 18 pushed the price above US $37.
It was a high not seen in 10 years, since the onset of the Gulf War.
Inspired by the French example, truckers in the United Kingdom took up the cause for a few days in the middle of the month.
Drivers of trucks, or lorries as they are known there, were angry at footing some of the highest fuel prices in the industrialized world – and as much as 80 per cent of what they pay at the pumps goes into government coffers. They succeeded in crippling England by blockading fuel depots, leading to panic buying and fuel hoarding until the pumps ran dry.
But unlike his French counterpart Lionel Jospin, British Prime Minister Tony Blair vowed to resist the pressure tactics. And he’s being paying a steep political price at the polls because of it.
By Sept. 21, transport ministers from across the continent were meeting in Luxembourg to develop plans for coping with the spreading crisis. Protests that included farmers and fishermen had sprouted in Belgium, the Netherlands, Germany, Denmark, Norway, Spain, Italy and even Israel.
But according to Stephan Levesque, a spokesman for Federation Nationale des Transports Routier, one of France’s largest trucking groups, the mother of all protests was really a serious flare-up of a long-running battle over an increasingly unworkable taxation system.
“Our government in 1999 had started an annual program of increasing diesel taxes in stages. Why? One, the taxes on diesel had been lower than those on regular gas. So it was a bid to equalize the systems. Two, because it was trying to meet European Union guidelines set out in the Kyoto agreement on emission limits.”
The FNTR countered, and was successful at negotiating increased tax rebates to the rising bite at the pumps, Levesque said in a telephone interview.
In addition to the concessions announced Sept. 9, the French government agreed to further fuel-tax cutbacks Sept. 21.
“The government’s idea is to say ‘we automatically reduced the taxes when the base prices are increasing,'” he said.
The U.K.’s Road Haulage Association, which represents truckers or “hauliers” there, didn’t have a hand in organizing the highly effective “blockages,” said Kate Gibbs, a spokesman for the Weybridge, County Surrey organization.
“We keep hearing about E-commerce, don’t we? We’re now talking about the E-protest,” Gibbs said in a telephone interview.
Clearly proud of the attention British truckers have attracted, Gibbs said “they haven’t got the government’s attention, they’ve got the public’s attention.”
She added, “we don’t want to see a flash-in-the-pan response to it. You know, just something to keep us quiet. We want a long-term solution to a very serious problem.”
Citing the ideal of harmonization that the European Union is meant to reinforce, Gibbs admitted, “it is now impossible to achieve that with the French government giving way to the protesters.”
“It actually makes the life of British international haulage companies very, very difficult, because we keep getting our lorries stuck in other people’s protests,” added David Russell.
He is a press officer with the Freight Transport Association, a group representing “the U.K.’s industrial supply-chain needs,” including large and small trucking companies, carriers, and even oil companies and their distributors.
In explaining the problems of a harmonized Europe, Russell noted wryly, “it’s been a habit of the French to blockade our lorries” on the route from Dover, England to Calais, France. “Even the French fisherman have blockaded our ferries carrying our lorries. So there tends to be a situation that whenever the French are annoyed they blockade our lorries.”
Britain uses what he calls “a fuel-duty escalator,” a method through which diesel taxes are increased in tandem with the inflation rate, plus a percentage that increases at another rate. “The idea for this was for it to act as a disincentive on our vehicle use, in order to help Britain to meet its Kyoto pollution targets.”
Russell said the FTA, which argues “England needs lorries,” has been negotiating taxation methods with the British government for the last 2-1/2 years.
“There needs to be a completely different tax system, so that diesel used in commercial vehicles, as opposed to diesel cars, has a discounted tax rate. We have proposed to government ways that they could do that.”