Oil companies pledge to protect consumers

19th September 2005, Comments 0 comments

PARIS, Sept 16 (AFP) - French finance minister Thierry Breton emerged Friday from a meeting with oil company executives to announce he had received assurances they would protect consumer interests during the current period of volatile oil prices.

PARIS, Sept 16 (AFP) - French finance minister Thierry Breton emerged Friday from a meeting with oil company executives to announce he had received assurances they would protect consumer interests during the current period of volatile oil prices.

He said that French oil company Total had agreed to absorb the fluctuations in the price of oil by holding back gasoline (petrol) price increases whenever possible, but would immediately cut prices in the event of a fall in oil prices.

"A fall (in the price of oil) is passed on immediately, an increase is smoothed out over time," Breton said, summing up the results of his meeting, before adding that the agreement "clearly goes in the direction of consumer interests".

The chief executive of Total, Thierry Desmarest, said that the French oil group had agreed that "in the case of brutal price increases, they will be spread out over several weeks".

According to a statement from the finance ministry, price falls will be passed on within three days and Breton said other oil companies had taken note of the arrangement with Total.

He reiterated a previous warning that the government would impose a special tax on oil company profits to return money indirectly to taxpayers, but said the commitments received on Friday "went towards what the government wants".

He also announced that an oil price watchdog would be formed to enforce the rights of consumers, while saying Shell, BP and Esso had agreed to invest "nearly EUR 500 million" between 2006-2008 and Total had agreed to invest three billion euros in the next five years to increase refining capacity in France.

Oil prices remain near historic highs at around US $63 a barrel after hitting the 70-dollar mark on August 30, prompting fears of an economic shock in rich oil-dependent countries and angering car owners who are feeling the pinch at the gasoline (petrol) pump.

Gasoline prices in France have fallen by an average two centimes a litre this week, according to the finance ministry. But previously, the price of diesel fuel had jumped 15 centimes since January and that of unleaded petrol 20 centimes.

That trend had unsettled Breton, who said on Wednesday that he would get tough with oil companies if they did not ensure that lower crude prices led immediately to lower gasoline prices.

"At the moment when there is a drop (in crude oil rates) I want it to be immediately passed on" to consumers, he told the LCI television network.

Copyright AFP

Subject: French news

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