French President Nicolas Sarkozy yesterday proposed in a radio interview suspending VAT on fuel oil to help EU member states deal with crude oil prices, which reached $135 a barrel last week. French consumers pay about 19.6% VAT on the price of oil, which had doubled since President Sarkozy took office last year. France is set to assume the EU presidency in July.
A spokeswoman for the European Commission commented that any change in VAT on fuel would require unanimous agreement by EU member states, and would in any case be the wrong response to high petroleum prices; EU finance ministers agreed in 2005 not to cut fuel taxes in response to rising world energy prices.
Original Source : http://www.autoindustry.co.uk/news/28-05-08_12
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