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Soaring Gas Prices in Europe Leave Motorists Fuming

Aired July 4, 2000 - 1:43 p.m. ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

LOU WATERS, CNN ANCHOR: There's a tiny bit of encouraging news for Americans on the road this Fourth of July. The Energy Department reports that gasoline prices have fallen in most places for a second straight week. The average national price fell three cents to $1.66 a gallon. We know that still sounds high, but wait until you hear what they're paying in Europe.

Here's CNN London bureau chief Tom Mintier.

(BEGIN VIDEOTAPE)

TOM MINTIER, CNN LONDON BUREAU CHIEF (voice-over): Imagine: four dollars a gallon for gasoline; not future prediction, but the current predicament for British motorists. In Britain, drivers now pay more out of their monthly income for gas than for housing or food; that according to a recent survey by the Automobile Association.

UNIDENTIFIED FEMALE: I just think it's crazy.

UNIDENTIFIED MALE: It's too much, too much.

UNIDENTIFIED FEMALE: It's very worrying for motorists.

MINTIER: It matters little if it is the British pound, Italian lire, French franc or German mark: Prices at the pump across Europe have motorists fuming. Some take it out on gas station attendants.

"They get angry at us," says this man. "They complain all the time about increases in price."

Last month, OPEC oil ministers met in Vienna, increased production by more than 700,000 barrels a day. Saudi Arabia has just opened the tap a little more, promising to pump another half-million barrels a day to get prices down. OPEC has also blamed high prices on greed, not gasoline producers, but governments. What most people do not see at the pumps is how much from each gallon is taxed. In Britain, they will not allow that information on the pumps. Eighty percent of the price is tax.

JULIAN LEE, CENTER FOR GLOBAL ENERGY STUDIES: We're already at sort of the top end of what we have seen in the second quarter. So I think prices will drift down over the months ahead. But it will be slow. MINTIER: Governments are under increasing pressure to do something. But taxes that are added seem to never go away. Analysts say high gasoline prices boost inflation.

MICHAEL SAUNDERS, SALOMON SMITH BARNEY: The direct effect to the rise in oil is adding between a half and one percent to inflation over the last year. And so take a similar amount of consumer incomes.

MINTIER: In France, some motorists seem to take higher prices in stride, like everything else. Are they unhappy about high gas prices?

UNIDENTIFIED FEMALE: Of course, but is life.

MINTIER: Sarcasm reigns supreme.

UNIDENTIFIED MALE: It's very cheap, the cheapest in the world.

MINTIER (on camera): Analysts say lower prices will be slow to arrive. They will not come from lower taxes, but market forces. If more oil flows into the market, the price will come down. The question most motorists seem to be asking is when?

Tom Mintier, CNN, London.

(END VIDEOTAPE)

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