Sunday, September 11, 2005

Europe never fails to disappoint

Here's the latest idiotic European idea:
BP Plc, Europe’s largest oil company, and Total SA, the largest refiner in the region, said they would drop pump prices by 2 to 3 cents at their French service stations, after the French government threatened a windfall tax on “exceptional” profits and enforced increased investment in renewable energy.
Europe's finance ministers, meeting in Manchester in the UK on Friday, were expected to step up the attack on Saturday, urging the oil industry to increase refining capacity, and calling for greater transparency in the oil market to tackle speculation.
The ministers want the industry to take its responsibility for the spike in oil prices, which Jean-Claude Trichet, European Central Bank president, said was “clearly a risk” to the economy.
Although they want lower prices at the petrol pump, Jean-Claude Juncker, president of the 12-member single currency eurogroup, suggested it was oil companies rather than governments which should bear the cost.
Therefore, when the price of oil is high the oil companies and not the states (who account for about 60% of the price of gas in Europe) have to give up on profits (instead of investing in innovation), and when the price of oil is low, presumably it will be the states that bail out the oil companies that risk going bankrupt.
EU Rota, who I am very sad to say is abandoning the blogosphere, has an excellent post on the subject.

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