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High gas prices fuel protests worldwide

Drivers, as well as fishermen and farmers, are being pummeled. Some are demanding government help.

June 02, 2008|Angela Charlton | The Associated Press

PARIS — Americans are shell-shocked at $4-a-gallon gas. But consider France, where a gallon of petrol runs nearly $10. Or Turkey, where it's more than $11.

Drivers around the world are being pummeled by the effects of record gas prices. And now some are hitting back, staging strikes and protests from Europe to Indonesia to demand that governments do more to ease the pain.

It's a growing problem in a world that's increasingly mobile and more vulnerable than ever to the cost of crude oil, which is racing higher by the day and showing no signs of stopping.

"I don't know why it is, but . . . it hurts," said Marie Penucci, a violinist who was filling up her Volkswagen to the tune of $9.66 a gallon at an Esso station in Paris.

As she pumped, she looked wistfully at a commuter climbing onto one of the city's cheap rental bicycles, an option not open to her because she must travel long distances to performances.

As oil soars, the effect on drivers can vary widely. Taxes and subsidies that differ from country to country are the main reasons, along with limits in oil refining capacity and hard-to-reach places that drive up shipping costs.

In Europe and Japan, for example, high taxes have made drivers accustomed to staggering gas prices. As a result, plenty of European adults never even bother to learn to drive, preferring cheap mass transit to getting behind the wheel.

Those who do drive are still testing new pain thresholds. And it would be worse in Europe if the strong euro weren't cushioning the blow.

On the other hand, in emerging economies such as those in China and India, government subsidies shield motorists. But that still means governments themselves have to find a way to afford the soaring market prices for oil.

Increasingly, people around the world are reaching the boiling point -- and it's not just drivers.

Fishermen in Spain and Portugal began nationwide strikes Friday, keeping their trawlers and commercial boats docked at ports. In Madrid, demonstrators handed out 20 tons of fish in a bid to win support from the public.

In Spain, the European Union's most-important producer of fish, the fishing confederation estimates fuel prices have gone up 320% in the last five years -- so high that many fishermen can no longer afford to take their boats out.

French fishermen and farmers, who need fuel for trawlers and tractors, say their livelihoods are threatened by soaring prices and have blocked oil terminals around France and shipping traffic on the English Channel to demand government help.

British and Bulgarian truckers are staging fuel protests, too.

Indonesians are staging their own protests against shrinking gasoline subsidies in a nation where nearly half the population of 235 million lives on less than $2 a day.

The world is driving more than ever: There are 887 million vehicles in the world, up from 553 million just 15 years ago, according to London consultancy Global Insight. It estimates the figure will be 1 billion four years from now.

In Europe, the high tax burden means crude prices make up a smaller part of the retail cost of gas.

"The pain of a rise in prices is much less in Europe, because we may be paying a lot more here, but the rise in a percentage sense is a lot smaller," said Julius Walker, oil analyst at Paris-based International Energy Agency.

The United States, with its relatively low taxes, is considered to have retail prices closer to what energy data charts call the "real cost" of gasoline -- closely linked to the price of oil.

So as oil prices have soared, U.S. gas prices have soared along with them.

The average price for regular unleaded gas have risen from $1.47 a gallon in May 2003 to more than $3.96 now, a jump of nearly 170%. In the same period, the most popular grade of gas in France rose by just over 90% -- a relatively gentle climb.

Americans are driving less -- about 11 billion fewer miles in March 2008 than March 2007, a drop of about 4%, according to the Schork Report newsletter. It was the first drop in March driving in almost three decades.

In the U.S., presidential candidates Sens. John McCain (R-Ariz.) and Hillary Rodham Clinton (D-N.Y.) have proposed suspending the federal gas tax for the summer to give drivers some help, although it is not clear whether they would actually see much relief.

French President Nicolas Sarkozy has urged the EU to cut its value-added tax on fuel.

Nations that produce huge amounts of oil aren't necessarily in better shape.

Russia is the world's second-leading producer of oil, but gas there comes to about $3.68 a gallon -- about the same as in the U.S., where the average worker earns about six times as much money.

Much of the Russian cost comes from taxes, which run 60% to 70%. Limited refining capacity and the costs of transporting gasoline across the country's vast expanse also push up prices.

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