23 January 2006

BRUSSELS – Belgium’s oil industry has ruled out helping the government to finance heating grants for consumers.

Budget Minister Freya Van den Bossche came in for criticism last week when it was revealed that the government had promised to repay the oil sector EUR 100 million used to compensate the public for the higher cost of energy.

Last year, after a financially good year for the oil sector, the government decided it should pay EUR 100 million into federal coffers to help the government give Belgian households a discount on the price of heating oil.

The opposition party said Van den Bossche had led everyone to think the money from oil companies was “extra” funding.

The reality seems to be that it was a loan and that the government will have to find taxpayers money to repay it.

An agreement, signed between the oil sector and Van den Bossche, Finance Minister Didier Reynders and Economy Minister Marc Verwilghen was leaked to the press on Thursday.

An embarrassing debate for Van den Bossche followed in the Parliament. Opposition parties asked whether she had lied to them or didn’t know what she had signed.

Reform Movement MR federal government State Secretary Hervé Jamar also said there could be no doubt about the agreement: all of the money must be repaid.

However, Jamar could give no definite answer to the question of where the government was going to find the EUR 100 million.

Jamar represented Van den Bossche in the parliamentary debate because the budget minister was forced to stay at home on medical advice after a car accident on Monday.

On Friday evening, Van den Bossche announced the government was in agreement to ask the oil sector to contribute at least part of the public subsidies. She added that she had spoken with Prime Minister Guy Verhofstadt on the phone in the States.

However, in an interview with VRT radio, Gaetan Van de Werve, secretary general of the Belgian Petrol Federation, rejected Van den Bossche’s appeal.

“The government cashed 550 million extra VAT and excise receipts because of the rise in petrol prices,” he said.

“It is therefore perfectly capable of reimbursing the loan of EUR 100 million given by the oil sector.”

Van de Werve argued that the profits acquired from the rise in prices of oil products did not benefit Belgian distribution companies.

The profits were made overseas where the oil was produced – in Angola, the Gulf of Mexico and Kazakhstan.

Under the contract, the government will have to repay the EUR 100 million to the petroleum industry by 31 March or the petroleum sector will be allowed to increase the price of fuel by EUR 0.65 per litre.

[Copyright Expatica News 2006]

Subject: Belgian news