Europe gasoline price plunges, drivers still fuming

Pump prices in Europe have dropped at their fastest rate for at least a decade over the past month, motoring organisations said, but drivers are still fuming that tax levels are hitting them in the pocket.

Wholesale gasoline prices have reflected crude's plunge and dropped from peaks about $800 a tonne in early August to less than $500 last week - a fall reflected on garage forecourts.

But drivers' groups say the high levels of tax levied by European governments have stopped retail prices falling as sharply.

While wholesale prices have dropped almost 40 per cent, the biggest fall in retail prices - in Greece - has been only 16 per cent.

"Unleaded peaked at 98.5 pence a litre on August 1, then the oil price started to come down. Petrol has now dropped by 11 pence a litre," said Ruth Bridger of the AA, a UK motorists' body.

"We have done a major mid-month report every month for 18 years and the mid-August to mid-September drop was the biggest that we have ever seen."

The move has been reflected across Europe. In Germany, where taxes made up two-thirds of the $1.58 a litre being paid on Thursday, prices had fallen eight per cent since since August.

Other falls were even more dramatic. French prices fell 12.7 per cent to €1.12. Belgian prices lost 10 per cent to €1.272. Dutch prices dropped nearly 13 per cent to €1.325 and in Greece they plunged by almost 16 per cent to 91 cents.

Retailers have trumpeted the downward move, which contrasts with years of increases, as good news for their customers.

Drivers' groups kept their celebrations in check, saying prices were still too high and governments should lower taxes. "One of the reasons prices are so high is because the overwhelming majority of what we are paying is tax," said Tony Vickers, spokesman for the Association of British Drivers.

British truckers also complained of being squeezed, despite the wholesale cost of diesel having dropped almost 20 per cent from a high around $710 a tonne in early August. "We welcome a fall, but however much it falls, fuel duty remains the key issue," said Kate Gibbs, spokeswoman for the Road Haulage Association. "At the moment our members are just battling to stand still."

Russia is a rare exception to the downward trend in fuel. Gasoline prices in the world's second largest oil exporter rose to 18.6 roubles ($0.695) a litre in mid-September from 17.72 roubles in mid-August as producers sought to compensate for higher export duties.