WRITTEN QUESTION E-3136/00

by Juan Naranjo Escobar (PPE-DE) to the Commission

(6 October 2000)

Subject: The fuel revolt

Brent crude has hit a new record in the last few days, even after the OPEC countries agreed to increase production to 800 000 barrels a day, which amounts to 3 % of current production. The fuel revolt has seen the mobilisation of sectors such as agriculture and transport in various Member States. The lack of stability in the price of crude in tandem with the low exchange rate for the euro on the international markets, could lead to a fresh rise in inflation in the euro zone, which the latest Eurostat data, published on 18 September, indicate was already running at 2,3 % in August.

The lack of a joint assessment of the current crisis on the part of the Member States is deplorable. What we have had instead is the individual adoption of national solutions seeking to put an end to the blockade by certain influential sectors, by lowering taxes.

Does the Commission not think that we are actually witnessing a possible infringement of the principles laid down in Articles 81 and 82 which guarantee competition within the internal market? What has been the reaction of the various European institutions to the fuel revolt and the measures adopted individually by the Member States? How does the Commission think this crisis might affect other sources of energy? Is a common but consistent approach feasible in order to eliminate the differences in national taxation, by seeking a global strategy in fixing petrol prices, without any need for a common foreign policy?

Answer given by Mrs de Palacio on behalf of the Commission

(29 November 2000)

In its communication of 4 October 2000 on the European Union's oil supplies(1), the Commission clearly came out against the idea of cushioning the rises in oil-product prices by lowering taxes. Giving way in this area would be tantamount to transferring tax revenues to the members of the Organisation of Petroleum Exporting Countries (OPEC) and to give them an incentive to maintain artificially high rates, since the effects of increases in crude prices on consumer prices would be offset by lower taxes. Moreover, any such reduction in taxation would be out of step with our environmental aims.

Lowering taxes on an ad hoc basis is not fully compatible with European law even though this is still a long way away from truly harmonising excise duties and VAT rates.

Several Member States recently announced support measures for individual sectors that include, in particular, a lowering of excise duties on diesel fuel for use in road transport. Such forms of action must be assessed against the background of Community law on State aid within the meaning of Article 87 (formerly Article 92) of the EC Treaty (since they are likely to distort competition and thus raise barriers to the creation of the internal market), and in the light of the Community legislation on excise duties on mineral oils. To that end the Commission has already asked several Member States to provide it with full information on all of the action taken or contemplated at national level. If certain of these were to emerge as being in breach of Community law, more especially in respect of State aid, the procedures provided for in the EC Treaty would then be activated.

Moreover, such measures are not consistent with the aims pursued by the Community with regard to not only environmental but also energy and transport policy.

An upward alignment of taxation rates among the Member States would thus seem to be inevitable. Moreover, this is what the Commission puts forward in its draft Directive on the taxation of energy products(2) which has been awaiting the Council's attention since 1997.

Attempts to soften the blow of price rises by lowering taxes should therefore be discouraged. Precisely the opposite tack should, in fact, be pursued: the excise duty on fuels should be genuinely harmonised upwards. The only means of adjustment that can be contemplated is VAT: a decision to stabilise revenues could be taken if there were a major fluctuation in oil prices.

(1) COM(2000) 631 final.

(2) OJ C 139, 6.5.1997.