UK finance minister Gordon Brown has steadfastly refused to cut taxes on fuel despite the increasing tensions over rising prices. However, the same cannot be said of governments on continental Europe as concessions have been handed out across the region from France to Hungary.
Governments across Europe are facing up to the possible serious impact of protests from their citizens over the price and availability of fuel. The tensions have steadily increased over recent months as the cost of crude oil has continued to push new boundaries, causing pump prices to increase. Meanwhile rapidly growing demand in the emerging markets of Asia and the impact of Hurricane Katrina in the US have increased concerns over availability.
However, some industry onlookers have argued that it seems the UK government is out of step with its continental neighbors with regard to the growing fuel problem. While a number of European nations have given way to people pressure, the UK government has resolutely held to its position that it should take no action.
Gordon Brown has told a conference of trade unions that the solution to the current crisis lies with the oil producing nations and not with the UK government. Mr Brown argues that the oil producers should pump more oil and the consumer nations should endeavor to work together to ensure future problems can be effectively addressed. The finance minister contests that coordinated international action to bring down world oil prices and to stabilize the market for the long term is needed.
So far Mr Brown’s impassioned arguments have cut no ice with British motorists, resulting in threats of a new wave of protests at refineries and the predictable result of forecourt madness as motorists ‘panic buy’ petrol. While Mr Brown holds fast, a sense of deja-vu has descended over the UK as it is exactly five years since the last fuel crisis and five years since a considerable collective voice has called for fuel tax cuts. Last time around the concern was that prices were topping 80 pence a liter. Now the concern is that they are crossing the GBP1 barrier.
However, a collective vocal demand has, it seems, had an effect on the continent. It seems governments across the Channel have less stomach for the fight than Gordon Brown. French prime minister Dominique de Villepin has caved in to pressure by announcing rebates on fuel taxes for farmers. Meanwhile, fuel retailers in France and Austria have cut their prices over the threat of government imposed windfall taxes. In the east, the Polish and Hungarian governments have pledged to reduce excise and VAT duties on petrol.