Clubs' reaction to high fuel prices

Publication date: 07 July 2008

On top of oil prices predicted to rise to over USD 200 per barrel, European car drivers face the world's highest fuel taxes. We look at how some clubs are reacting and what they propose doing to beat the price hike.

France's Automobile Club calculates that for every ten euro-cent rise in the price of fuel, the state receives a further two euro-cents. This works out at several hundred million euros of additional payments by car drivers each year in France alone. But changing value added tax (VAT) is no easy matter in the EU. As with any other product, EU member states would need unanimous agreement. Even faced with petrol protests, the Spanish, German and many other governments remain radically opposed to tax reductions. State revenue from energy taxes is obviously just too lucrative. At EU level, finance ministers can hide behind a so-called “Manchester agreement” from September 2005 where they committed not to decreasing tax on fuel.

Reacting aginst the fuel price hike, France's Automobile Club hopes to make use of its privileged contacts during the six-months of the French Presidency of the EU. French President Nicholas Sarkozy has already heard some of their arguments recently proposing to cap the amount of VAT on petrol. The Automobile Club, like others, has also given full backing to the FIA’s Make Cars Green campaign, launched in conjunction with UN World Environment Day. The campaign aims to help reduce the impact of cars on the environment. The ten points for greener motoring encourage motorists to think green before they drive (www.makecarsgreen.com).

As for the UK's AA, it is urging members to practice eco-driving. Earlier in the year, 50 AA employees took part in an eco-driving experiment. Each drove normally for the first week and then, after apply eco-driving principles, saved an average 10% on their weekly fuel bill. The best performers saved 33%. The AA has also taken a tough political stance. Surveying some 18,500 members, the AA noted that three quarters do not think that any of the three main political parties are "motorist friendly". A majority of AA members also believe the transport minister should cut or freeze fuel tax. Almost half (49%) believe that the government is most responsible for the rise in fuel prices. “The Chancellor does need to look again at levels of duty on fuel as it is taxed as a luxury item at rates higher than champagne rather than as a necessity,” said the president of the UK's AA Edmund King.

Germany's AvD has given practical advice to help drivers to fill up at cheaper tank stations. Drivers should fill up even if the petrol tank is only half full. This makes it easier to systematically avoid expensive petrol stations in favour of more favourably priced alternatives. “These are usually independent stations near large shopping centres or stations alongside the motorway,” notes the AvD. Together with www.clever-tanken.de, the AvD helps point drivers to the cheaper stations.

Club credit cards are another way to offer members discounts. Germany's ADAC credit card, for instance, can mean savings of around four euro-cents per litre. Switzerland's TCS credit card enables members to claim discounts at BP and Tamoil. TCS is also acting politically given that car drivers in the Alpine republic already pay over EUR 6.8 billion to the government in addition to the high petrol prices. In the field of technical studies, the club recently tested the accuracy of manufacturer statements as to fuel consumption. On the basis of the study, and even considering the optimal testing conditions, the TCS advises drivers to systematically measure consumption and kilometres driven, analyse own and recommended driving patterns. Additionally, drivers should have vehicles checked and gain first hand information from the garage or importer on consumption.

Norwegian club NAF's Håkon Glomsaker points out that many people rely on their cars to get to and from work and to perform other necessary activities. There is little alternative than to use the car. “The government must drop fuel taxes now. The higher prices at the petrol stations have not at all contributed to the desired environmental effects the government talks about,” said Glomsaker. His colleagues at Denmark's club FDM appear to be in full agreement. Danish motorists are also calling for tax measures that more clearly support environment-friendly cars.

Enrico Gelpi, president of Italy's ACI, wants greater rationalisation of networks and the launching of a plan to reduce fuel taxes and duties. “It is necessary to insist as soon as possible on a large dose of competition in the retailing of fuel,” said Gelpi. Swedish club Motormännens also takes a critical stance noting a decreasing number of owners of petrol stations. The latest example is Statoil's buying of petrol station chain Jet - a “real threat” to competition on the Swedish market according to the Swedish club. The Commission has until 18 September 2008 to decide on this merger. “We are worried by this considering the lack of real competition that characterizes the Swedish petrol market for so long,” said Tomas Nilson from Motormännens Riksförbund.

Austrian club ÖAMTC has collected over 100,000 signatures in a campaign against “fuel price madness”. “The protest against taxes has had its first success. But the increase in commuter deductions and kilometre rates at the beginning of July are only a first step,” said ÖAMTC's Mario Rohracher. Aside from tax measures, ÖAMTC also wants the government to enforce greater price transparency at petrol stations. Listening to the message, Austrian Finance Minister will push for a European Regulation against fuel price speculation.

EcoTour of Europe
The EcoTour pits 42 teams of “eco-drivers” from all over Europe to get the best out of most fuel-efficient cars available on the market. At least 25 of the 42 teams are expected to come from FIA clubs. Starting in Barcelona on 13 September, the EcoTour finishes with a symposium in The Hague on 19 September organised by Dutch club ANWB entitled “Towards Zero Emissions”. The aim is to promote the benefits of eco-driving and fuel-efficient cars, in terms of saving fuel, saving money, and – most importantly – saving the planet.