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Monday, June 2, 2008

British Leader Warns of Global Oil Price

Published: May 29, 2008, NY Times.

PARIS — As protests against the soaring cost of fuel threatened to widen in Europe, Prime Minister Gordon Brown of Britain warned on Wednesday that the world confronted a global shock caused by skyrocketing oil prices.

“The global economy is facing the third great oil shock of recent decades,” Mr. Brown said in an article published in The Guardian newspaper and on his Web site (www.pm.gov.uk).

The challenge, he wrote, demanded “global solutions” that should top the agenda of the forthcoming G-8 summit of industrialized nations in Japan.

“There is no easy answer to the global oil problem without a comprehensive international strategy,” Mr. Brown said.

“As continuing high oil prices present us all with an immense challenge,” he said, “the way we confront these issues will define our era.”

His warning was published a day after truck drivers protesting increases in the price of diesel fuel paralyzed parts of London by driving slowly in convoys and halting their rigs on a busy highway leading into the west of the capital. Other truckers took similar action in Wales. representatives said they were demanding a reduction of more than $2 a gallon in the price of diesel.

The protests mirrored action by French fishermen who blockaded ports on the English Channel. At the same time, 300 farmers in southern France near Toulouse blocked entry to a Total fuel depot.

Such is the anger in France that President Nicolas Sarkozy suggested on Tuesday reducing the value-added taxes on fuel to offset increases in the price of crude oil that have climbed beyond $130 a barrel. Such are the price increases, coupled with steep government levies on fuel sales, that diesel fuel in Britain and France costs about $10 a gallon — more than twice the price in the United States.

Mr. Brown met oil industry executives in Scotland on Wednesday at a time when he is under pressure from legislators to postpone increases in taxes affecting the cost of driving. Oil industry leaders also want taxes to be lowered on their operations in Britain’s North Sea and the government is urging oil companies to increase oil production from the aging oil-fields there

In addition to the demonstrations in France and Britain, Spanish truckers have joined fishing boat crews n protesting the cost of fuel and demanding that the European Union relax its rules to permit higher subsidies from their governments. Fishermen in Italy, Greece and Portugal are considering broadening the action later this week.

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