French government offers unions a cut in tax on fuel

French union leaders have reacted positively to an offer early this morning by the French government to lower fuel taxes

French union leaders have reacted positively to an offer early this morning by the French government to lower fuel taxes. The breakthrough came after prolonged talks with leaders of road haulage unions, whose members have been blocking refineries and depots for two days.

The union leaders and government agreed to a drop in tax on a litre of petrol by 35 centimes (€0.05) this year and by 25 centimes next year, union leaders said on leaving the ministry early this morning.

The intense negotiations, which started at 11.45 a.m. (10.25 a.m. Irish time) yesterday, were earlier hailed by a transport ministry as "very positive". French authorities introduced fuel rationing across most of the country yesterday, as the protest by freight-drivers and farmers against spiralling oil prices triggered the first serious shortages at the pumps. World oil prices reached 10-year highs.

For a second day, demonstrators continued their blockade of 60 out of the country's 70 major oil refineries and depots, demanding immediate government help to compensate for a steep increase in their operating costs.

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Protesters also disrupted high-speed train services from Bordeaux in the south-west, setting fire to palettes and hay-bales along a stretch of track and forcing a dozen trains to be delayed before the lines were cleared around noon.

In Paris yesterday, the Transport Minister, Mr Jean-Claude Gayssot, held a third round of talks with representatives of the haulage industry, but despite expressions of good will on both sides there was no sign of an immediate breakthrough.

As panic-buying cut into stocks round the country, prefects - state-appointed governors - issued orders requisitioning petrol-stations for the emergency services, and limiting the amount of petrol sold to private motorists.

The measures affected the whole of France.

In the north-west Calvados department, private motorists were restricted to 20 litres of fuel, goods vehicles to 50 litres, and a ban was issued on distributing petrol in canisters. Some 37 petrol stations were reserved for the police, fire and medical services.

In Loire-Atlantique on the Atlantic coast, the prefecture issued a statement saying that "on current trends there is a strong chance that by this evening the department will be totally out (of fuel)".

In earlier talks, the government had offered the industry a reduction in fuel tax of between 20 and 25 centimes (€0.0310.038) per litre, falling some way short of the drivers' demand for a cut of 50 centimes (€0.076).

Mr Gayssot also proposed a mechanism for freight companies to get round future oil price rises by automatically passing the added costs on to their clients.

The protest has been joined by farmers - who also claim that their costs have rocketed because of the rise in the price of oil - and by ambulance- and taxi-drivers.

They were following a course laid down last week by French fishermen, who won substantial concessions from the government after blockading a number of ports in protest against high oil prices. The former French prime minister Mr Raymond Barre, of the centre-right UDF, said the strikes "give a pretty sad picture of our country".

In Belgium the main freight federation called for a protest march on Sunday in Brussels to demand financial help, and in Spain farmers' unions warned of "very serious demonstrations" unless the government steps in to alleviate the oil price rise.

In Spain, a oil-consumers' group representing farmers, truckers, fishermen and lorry-drivers also called for a boycott of the main petrol company, Repsol.

In Toulouse, police called out to direct traffic among the snaking queues said that tempers had flared when waiting motorists saw those ahead of them filling both their vehicles' tanks and jerrycans.

But in one petrol queue of 50 vehicles on a highway leading out of Bordeaux, some passengers sprawled on top of their cars, seizing the chance for an unexpected sunbath.