WRITTEN QUESTION E-3136/00 by Juan Naranjo Escobar (PPE-DE) to the Commission. The fuel revolt.
Date: 2000-10-06
Institutions: European Parliament, Provisional data
Subjects: common price policy, motor fuel

C 151 E/76

Official Journal of the European Communities

EN

22.5.2001

Answer given by Mrs de Palacio on behalf of the Commission

(16 November 2000)

The aim of the proposal for a regulation of the Parliament and of the Council on the accelerated phasing-
in of double hull or equivalent design requirements for single hull oil tankers (1) is to ensure that the
transport of oil and oil products by sea is carried out in safe and acceptable conditions, with a minimum
risk of oil pollution in case of accidents. Harmonised action is necessary to avoid re-occurrence of oil
pollution of European coasts, fauna and flora and harm to the marine environment.

The means to achieve this improvement is by accelerating the phasing-in of double hull tankers i.e.
replacing single hull tankers with double hull tankers. It is not possible to give concrete numbers on the
impact of this measure upon employment of seafarers as it is not possible to establish how operators will
use their vessels in the coming 15 years, nor to establish under what flag operators will be sailing.

The Commission proposal, if adopted by the Parliament and the Council, will increase the demand for new
building, which is expected to have a positive effect for the shipbuilding industry. However, it can be
expected that due to the excess shipbuilding capacity available in the Far East and the fierce and aggressive
pricing policy of that industry, European shipyards will have to compete with Asian shipyards as regards
the major part of new shipbuilding orders arising from the accelerated phasing-in scheme, in particular in
the segment of the large tankers. The positive impact on employment for the European shipbuilding
industry may therefore be mitigated, although it can be expected that European shipyards will secure a
share in this replacement scheme, particularly for smaller oil tankers. In addition, European yards(cid:146) main
benefit from the increased demand for tankers will be indirect, since this could reduce the pressure from
Far East competition in other market segments.

The Commission has no evidence that the competitive advantage of the Asian shipbuilding industry is
based upon cutting corners on social and labour conditions or on technological or environmental
dumping. Detailed price monitoring commissioned by the Commission has revealed that market distor-
tions have to a large extent originated from systematic price undercuttings by South Korean yards. Their
prices often do not cover all financial costs and therefore do not represent the ship(cid:146)s normal value as
defined in the World Trade Organisation (WTO) anti dumping agreement. In view of these findings, the
Commission is of the opinion that measures aimed at ensuring a level playing field for the European
shipbuilding industry should not be based on alleged social, technological or environmental dumping, but
rather should focus on the termination of Korea(cid:146)s non-market oriented pricing practices. The Commission
is currently engaged in bilateral consultations with Korea, and has not ruled out the possibility to raise the
issue in a WTO context.

(1) OJ C 212 E, 25.7.2000.

(2001/C 151 E/087)

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.

22.5.2001

EN

Official Journal of the European Communities

C 151 E/77

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(cid:146)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
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.

include,

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(cid:146)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.