France speeds up measure to cushion petrol prices

PARIS, SEPT 20: France will apply tax compensation measures from October 1 that will cushion consumers against any future rise in petrol p...

PARIS, SEPT 20: France will apply tax compensation measures from October 1 that will cushion consumers against any future rise in petrol prices, Finance Ministry sources said on Wednesday.

But the measure, announced as part of the 2001 Budget Bill presented to the Cabinet after popular discontent over fuel costs, would only knock current petrol prices at the pump by 0.20 French francs (2.5 US Cents), or about 2.5 per cent, per litre on average, finance ministry sources said.

The measures, first announced in August before truck owner scrippled the country’s fuel supplies with a week-long protest this month, were originally planned for January but brought forward in response to public pressure for lower fuel taxes.

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The Budget Bill was based on the hypothesis of a Euro worth $0.95 next year and world oil prices of $25.8 per barrel, the finance ministry sources said.

The current price of a litre of high grade petrol in Paris petrol stations is about eight francs per litre, taxes included. World oil prices have soared to 10-year highs in recent weeks at well over $30 a barrel.

Recent protests over truckers, farmers and others in France have spilled across Europe and also generated wider discontent over petrol pump prices within France.

The government conceded diesel tax cuts to fishermen and truckers, sparking off pressure for an across-the-board measure to lighten the burden of soaring fuel prices.

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The compensation measure, originally announced in August, would reduce a tax known as the TIPP ("domestic tax on petroleum products") in proportion to any rise in value added tax (VAT) revenues if oil prices continue to climb.