EU road haulage forum to be set up as oil price hits 10-year high

European Union transport ministers agreed last night to set up a forum to examine the problems of the road haulage industry after the price of oil soared to its highest level for 10 years. The ministers said the EU should press the Organisation of Petroleum Exporting Countries (OPEC) to reduce oil prices and that the European Commission should examine the pricing policy of big oil firms to make sure they do not create a cartel.

The ministers were meeting in Luxembourg after the price of US light crude oil for October reached $37.80 a barrel, its highest level since Iran invaded Kuwait in 1990, before slipping back to $37.20. Dealers blamed yesterday's price rise on new data showing that US petrol inventories remain low despite OPEC's decision last week to up oil production by 800,000 barrels a day.

The Minister for Public Enterprise, Ms O'Rourke, last night said the decision to set up an EU forum on the haulage industry was a significant step forward.

"What we have done is focus the minds of individual ministers in individual countries that these are problems that must be addressed and that we can't leave the road haulage industry just to swing along and not to have attention paid to them and I think in that it was very worthwhile," she said.

France, which holds the EU Presidency, surprised some ministers with a draft paper calling for the harmonisation of fuel tax throughout the EU - a proposal that Ms O' Rourke rejected flatly.

"I said we didn't have the remit as transport ministers to decide on fuel rebates or on taxation policy and that was for our own domestic governments, cabinets and finance ministers and I would report back and give my observations and my input into Cabinet considerations," she said.

France announced new concessions on fuel prices yesterday, bringing forward to next week a tax concession originally scheduled for January. Mr Lionel Jospin's Socialist-led government has already agreed to cut diesel taxes by 15 per cent following protests by hauliers, farmers and fishermen.

Last night's meeting was moved to Luxembourg from Brussels to avoid Belgian protesters.

The European Commissioner for Transport and Energy, Ms Loyola de Palacio, has criticised France, Belgium, Italy and the Netherlands for making concessions to protesters and this criticism was echoed by some in Luxembourg last night.

"There was a bit of gentle castigation of the countries that went up front and arranged their own packages prior to us having such a meeting," Ms O' Rourke said.

The price of oil is now almost double its average of $19 a barrel for last year but it would need to rise to $70 dollars a barrel to reach the level that provoked the crisis that followed the Iranian revolution in 1979.

The oil producing countries blame oil speculators for the latest price rises but some OPEC states indicated yesterday that they could agree another increase in oil production next week.

Ms O'Rourke said the oil price rise has highlighted structural problems within the Irish road haulage industry and she called on the association to work with the Government to ease the difficulties faced by hauliers.

"The industry is positioned very much on the financial rim of profitability. That's one thing that ought to be looked at. Secondly, the Irish Road Haulage Association needs underpinning. We've given them £100,000 a year for this year and the next four years to develop their own structures at a professional level within their business," the Minister said.