Brussels is today expected to send out a clear message to EU leaders that lowering taxes on fuel to mitigate the current price spike does not make sense in the long term and should be avoided.

Speaking to the press before the start of this morning’s final session of the European Council, which groups EU heads of government, Commission President Barroso said that although member states were permitted to take measures to help badly-hit sectors of the economy and low income families to cope with the current fuel crisis, permanent reduction of VAT or other taxes connected to fuel would not solve the problem.

"We need to adapt to the new scenario where oil prices are likely to remain high. The solution is alternative energy and new consumption habits"

France and Italy are the prime movers behind calls to lower or remove taxes on fuels. However, these calls are being resisted by other countries including Germany and the Scandinavian member states.

Prime Minister Lawrence Gonzi yesterday said the government is working on a strategy to encourage the use of alternative sources of energy. Measures will be announced by the end of the year.