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Last Updated: Tuesday, 13 September 2005, 15:10 GMT 16:10 UK
EU governments take fuel action
French farm
French farmers demanded action over rising fuel costs
Governments across Europe are taking action to curb fuel costs amid sporadic protests about rising petrol prices.

France is to offer fuel tax rebates to farmers while President Jacques Chirac has called on petrol retailers to make meaningful cuts to pump prices.

Retailers have cut prices in Austria after the government threatened a one-off tax on their profits.

Belgium, Poland and Hungary have also announced measures to cushion the impact of rising prices on consumers.

Help needed

The rise in fuel prices penalises farms
Dominique de Villepin, French Prime Minister

EU countries have come under pressure to control fuel costs amid a clamour for action from hauliers, farmers and motoring groups.

The French government announced a package of measures on Tuesday designed to ease the situation for farmers.

They will be offered tax breaks and refunds on fuel worth about 30m euros ($36.6m; 20.2m).

"The rise in fuel prices penalises farms, which cannot always pass the cost on," Prime Minister Dominique de Villepin told a meeting of farmers in Rennes.

"We must help them."

Similar financial assistance was announced for hauliers on Monday.

Farmers unions have said that they would study any government proposals before deciding whether to step up direct action.

French President Jacques Chirac urged ministers on Tuesday to put pressure on petrol retailers to cut pump prices further.

Austrian Chancellor Wolfgang Schuessel
Austrian Chancellor Schuessel said fuel prices were far too high

BP and Total announced price cuts last week but consumer and motoring groups said they have not gone far enough.

A spokesman for President Chirac said that he had asked finance minister Thierry Breton to urge "companies to commit themselves rapidly and wholeheartedly to invest in non-polluting energy and step up the pace of price cuts at the pump".

Tax threat

Petrol prices are to come down in Austria with BP and Austrian retailer OEMV announcing cuts of 3 cents and 2 cents per litre respectively.

Vienna had threatened to impose a windfall tax on the profits of leading petrol companies although the firms concerned said their decision was unconnected to the proposed measure.

A BP spokesman in Austria said it had been able to cut prices because wholesale gasoline prices had fallen.

The Polish and Hungarian governments have pledged to reduce excise and VAT duties on petrol while the Belgian government says it will reimburse VAT payments on home heating fuel.

Speaking at the Frankfurt motor show, German Chancellor Gerhard Schroeder said rising fuel prices were "certainly worrying".

The British government has ruled out any direct action over fuel costs.

Chancellor Gordon Brown ruled out cuts to fuel duties, instead urging Opec members to boost production and invest in new refineries.





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