France calls for fuel tax reduction

President Sarkozy calls on EU states to consider joint action on rising oil prices.

    Fishermen block a road after setting fire to pieces of wood in a protest in the north of France [AFP]

    Fisherman protests


    Such moves would need the approval of all 27 EU member states and could not be introduced unilaterally.

    Fishermen have been blocking numerous ports and oil depots around France this month to protest at the rising price of diesel, warning that without state aid they will go out of business.
    Sarkozy said that while haulage firms could pass on the oil price rises to their customers, some businesses, such as the fishing industry and private ambulance teams, were in a much more difficult position.
    He said he had asked the government to study how rising revenues from sales taxes on oil could be put into a special fund "to help those French who have the most need".
    The president said that he expected that this would amount to between $236m to $268m for each quarter of the year.
    "I would like to use all this money to finance aid," Sarkozy said.
    In a separate interview on Tuesday, Christine Lagarde, the economy minister, said she would raise the question of whether oil producing countries should boost output with France's allies in the Group of Seven (G7) industrial nations.
    "I have decided to alert all my G7 colleagues so that we raise the question together, between (oil) consuming countries, and that we put the case to producer countries.
    "We can't perpetually have a market where prices rise permanently, to the benefit of producing countries," she told France 2 television.

    VAT review


    Sarkozy also said that he wanted a general review of sales tax brackets in the EU, suggesting that the 19.6 per cent tax imposed on music, DVD and video sales in France be reduced to 5.5 per cent in line with that for books.


    "If things carry on like this we won't sell another CD in France," said Sarkozy, whose pop singer wife Carla Bruni is set to issue her third album in July.


    The president added that he would also push for a cut in the 19.6 per cent sales tax rate imposed on restaurant and bar bills in France, a longstanding demand that has repeatedly been rejected by other EU countries.

    Meanwhile, hundreds of truckers are protesting against the soaring cost of fuel in Britain, where diesel now costs more than $9/gallon.
    The motorists are calling for Gordon Brown, the British prime minister, to lower fuel taxes for trucking companies.

    SOURCE: Agencies


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