Fuel prices rise but Czechs stay calm

Throughout Western Europe lorry drivers have been busy blocking roads and blockading oil refineries in protest at rising fuel prices. But across the border in the Czech Republic, it seems to be 'business as usual'. Despite even more dramatic rises in fuel prices due to the strengthening of the dollar against the crown, there has been no industrial action. Vladimir Tax reports:

The soaring cost of diesel, which provoked haulage companies throughout West Europe to block refineries and petrol stations, poses the same serious economic problems for their Czech colleagues. However, they are not planning to stage mass protests either against the price of fuel itself or the tax, around 50 percent here in the Czech Republic, which makes it so expensive in the first place.

Mass protests would probably be pointless; Czech refineries have to react to the developments on the international oil market and economic analysts say it's highly unlikely that Parliament would move to cut the consumer and value added taxes.

Fuel prices thus are bound to remain high, since the promise by OPEC countries to increase production by 800,000 barrels is somewhat questionable--it is an open secret that some member countries have been systematically exceeding the limit by 5 or 6 hundred thousand barrels a day. OPEC's latest increase then is only marginal. Another factor that will push fuel prices even higher before the end of the year is higher demand, as many companies use oil for heating.

The high diesel prices will have a serious impact on the Czech transport industry, especially small and medium-size enterprises. There is fierce competition in this field, with supply estimated at a 30 percent surplus over demand. Economists expect diesel prices to rise further, because Czech companies rely heavily on it and it's hard for them to economise on fuel. On the other hand, demand for petrol is much more flexible. The rising prices have knocked demand down by 7 percent in the first half of this year and further a decrease in consumption is expected with the end of the summer season.

So while petrol pumps and refineries in West Europe are running dry, Czech haulage companies are clenching their teeth and coping with higher diesel prices while battling tough competition, and car drivers seem to have got used to the ever-higher petrol prices. The Czech Republic is a young democracy, and it will probably take some time before Czechs learn to fight for their interests as fiercely as their Western neighbours.