EU ministers turn heat on U.S. and firms over fuel prices
Top News Article | Reuters.co.uk
By Jan Strupczewski
MANCHESTER (Reuters) - The European Union urged the United States on Saturday to use less oil and kept the pressure up on oil companies to curb record prices that threaten to hit the euro zone's already sluggish economic growth.
Oil giants Total and BP bowed to intense political pressure on Friday and cut petrol prices at the pump in France immediately to help ease the pain of surging fuel and energy bills for households and businesses.
It was not immediately clear whether there would price cuts in other parts of Europe or if other oil companies would cut their prices too.
The European Union's 25 finance ministers, meeting in the northern English city of Manchester, planned to take a joint public stand on the rise in oil prices and call for endeavours to reduce oil consumption in the United States in particular.
"We will use our G7 meetings in Washington in two weeks to have a frank word with our American colleagues," Luxembourg Prime Minister Jean-Claude Juncker told reporters before the meeting started.
The G7 -- the United States, Japan, Germany, France, Italy, Britain and Canada -- meets in two weeks' time in Washington.
Juncker says that if oil remained expensive in the fourth quarter, economic growth in the euro zone this year could be around 1.0 percent rather than the previously expected 1.3 percent.
Oil prices around current levels in 2006 would also shave some 0.3 percent off next year's growth, he said after a first day of talks in Manchester on Friday.
Oil prices, boosted to record highs of nearly $71 per barrel by the damage inflicted on U.S. refineries and oil rigs by hurricane Katrina, eased on Friday to around $64 per barrel after the International Energy Agency began releasing reserves.
"Two million barrels a day from the decision of the International Energy Agency is working well," Austrian Finance Minister Karl-Heinz Grasser told reporters in Manchester.
"We have got the impact on the oil market that we wanted after (Hurricane) Katrina. We think this is ok now," he said.
While euro zone ministers agreed on Friday that cutting taxes on fuel was not the right response to growth risks posed by expensive oil, French Finance Minister Thierry Breton made oil firms Total and BP cut prices at the pump by threatening to slap a special tax on their extra profits.
Total, which made profits of about 1.5 million euros an hour in the first six months of this year, said it would cut unleaded fuel prices by 3 euro cents per litre and diesel by two cents.
"The oil sector players have a particular responsibility in this domain because they are making exceptionally big profits," Juncker said.
By Jan Strupczewski
MANCHESTER (Reuters) - The European Union urged the United States on Saturday to use less oil and kept the pressure up on oil companies to curb record prices that threaten to hit the euro zone's already sluggish economic growth.
Oil giants Total and BP bowed to intense political pressure on Friday and cut petrol prices at the pump in France immediately to help ease the pain of surging fuel and energy bills for households and businesses.
It was not immediately clear whether there would price cuts in other parts of Europe or if other oil companies would cut their prices too.
The European Union's 25 finance ministers, meeting in the northern English city of Manchester, planned to take a joint public stand on the rise in oil prices and call for endeavours to reduce oil consumption in the United States in particular.
"We will use our G7 meetings in Washington in two weeks to have a frank word with our American colleagues," Luxembourg Prime Minister Jean-Claude Juncker told reporters before the meeting started.
The G7 -- the United States, Japan, Germany, France, Italy, Britain and Canada -- meets in two weeks' time in Washington.
Juncker says that if oil remained expensive in the fourth quarter, economic growth in the euro zone this year could be around 1.0 percent rather than the previously expected 1.3 percent.
Oil prices around current levels in 2006 would also shave some 0.3 percent off next year's growth, he said after a first day of talks in Manchester on Friday.
Oil prices, boosted to record highs of nearly $71 per barrel by the damage inflicted on U.S. refineries and oil rigs by hurricane Katrina, eased on Friday to around $64 per barrel after the International Energy Agency began releasing reserves.
"Two million barrels a day from the decision of the International Energy Agency is working well," Austrian Finance Minister Karl-Heinz Grasser told reporters in Manchester.
"We have got the impact on the oil market that we wanted after (Hurricane) Katrina. We think this is ok now," he said.
While euro zone ministers agreed on Friday that cutting taxes on fuel was not the right response to growth risks posed by expensive oil, French Finance Minister Thierry Breton made oil firms Total and BP cut prices at the pump by threatening to slap a special tax on their extra profits.
Total, which made profits of about 1.5 million euros an hour in the first six months of this year, said it would cut unleaded fuel prices by 3 euro cents per litre and diesel by two cents.
"The oil sector players have a particular responsibility in this domain because they are making exceptionally big profits," Juncker said.
posted by Marcel at 8:43 AM
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