A spokesman said that, on similar occasions in the past, the
commission has said that "modifying the fiscality of fuel
to fight the rise in oil prices would send a very bad signal
to oil producing countries."
"We would be saying that we can raise oil prices and this
will be paid for by the taxes of Europeans. This would, in
principle, be a very bad signal that we do not want to
send," the spokesman on energy issues said.
A commission spokeswoman for tax issues said that the French
president's proposal was not clear and that more time would be
needed to study the idea.
On French radio earlier on Tuesday, Sarkozy said: "I want
to ask the question to our European partners: if oil continues
to increase, should we not suspend the VAT taxation on the
price of oil."
He spoke as French fishermen kept up protests over high fuel
costs launched three weeks ago and Spanish fleets went on
strike to press demands for government compensation.
French consumers pay about 19.6 percent VAT on the price of
fuel.
Under EU rules, member states cannot apply a VAT rate of less
than 15 percent unless they are able to obtain an exemption
for a specific product or service, which requires unanimous
backing from all other countries.
Oil prices have soared to more than 130 dollars per barrel in
recent months.
France is to take the helm of the 27-nation European Union in
July.
So
