Motorists and hauliers can expect little relief from high fuel prices following a modest increase in production agreed yesterday by the world's leading oil-producing countries. Ministers from the Organisation of the Petroleum Exporting Countries meeting in Vienna promised to increase production by 800,000 barrels a day from October 1st.
The increase was higher than many market analysts had expected, but fell far short of the 1.2 million barrels a day that Saudi Arabia is understood to have proposed.
The ministers agreed to meet again on November 12th to assess the impact of the increase on fuel prices, which have risen sharply in recent months.
EU finance ministers, who met in Versailles, ruled out generalised energy tax cuts to counter high oil prices, which have risen to more than $32 a barrel from just $10 a barrel in 1998.
Earlier, the EU ministers clashed over the advisability of tax concessions to buy off protesting hauliers in France.
In Vienna, the president of the OPEC conference said oil producers were determined to calm the markets. Venezuela's Energy Minister, Mr Ali Rodriguez-Araque, said: "We are all agreed on the need for timely and effective action to end the instability of the last three years."
Western governments will welcome the increase, which reflects US pressure on Saudi Arabia as the world's biggest oil exporter to help ease the pain consumers are feeling at the petrol pumps.
But Dr Leo Drollas, deputy director of the Centre for Global Studies, a London-based energy think-tank, predicted the decision would have little immediate impact on fuel prices. "It will get the price of oil below $30 a barrel but it will take months for that to happen."
OPEC ministers took four hours to reach their decision, with smaller producers such as Venezuela arguing they could not afford to allow the price of oil to fall too sharply.
The decision to meet again holds out the prospect of a further increase in production, but OPEC ministers argue that the most effective means of cutting prices is for governments to reduce petrol taxes.
Tax accounts for more than two-thirds of the price of petrol in most EU member-states and as protests over petrol prices have spread from France to Britain and Germany, the pressure to cut tax is growing.
"Governments are under pressure because the general public has become very much aware of who the real robber baron is and it's their own government," Dr Drollas said.
Most EU governments are reluctant to lose revenue by cutting fuel tax and Germany's coalition of Social Democrats and Greens could collapse if an attempt is made to reduce tax on petrol. But the rise in oil prices is a growing headache for Europe's governments, not least because of its impact on inflation.
The Taoiseach has welcomed the decision by OPEC as an indication that fuel prices will come down in the near future, but the Irish Road Haulage Association is demanding a meeting with Mr Ahern to discuss cuts in diesel costs. Unless it gets a response from his office by noon today it plans a blockade of ports similar to protests in France.
A spokesman for the Minister for Finance repeated the issue would not be considered until the December Budget, while a spokeswoman said the Taoiseach had "not ruled out" a meeting with the IRHA.
