Chirac at a cabinet meeting asked oil companies "to show strong support for the indispensable movement toward lower prices at the pump," according to government spokesman Jean-Francois Cope.

The president also praised an initiative by Finance Minister Thierry Breton to call a meeting of oil companies Friday over the situation.

Chirac asked "that everything be done so that these companies commit themselves quickly and strongly to investment in the development of non-polluting energies," Cope said.

Breton last week threatened oil companies with an "exceptional tax" in the face of rising oil prices and suggested that they lower their prices at the pump.

The minister on Friday expressed satisfaction with a decision by Total and BP to lower prices charged in their service stations from Saturday.

Meanwhile, Prime Minister Dominique de Villepin announced a fiscal aid package worth 30 million euros for farmers, who have been hit hard by the recent surge in oil prices.

"The increase in fuel prices penalises the farming industry, which cannot always pass on these higher operating costs. We must help them," Villepin said at the opening of an agriculture fair in Rennes, western France.

The government is to raise its rebate for the TIPP tax on heating oil to five euro cents per litre from four cents, and increase its rebate on the TIPP for natural gas to 80 percent from 60 percent currently.

Villepin also announced a new 50 percent rebate for the TIPP on heavy fuel oil.

All these measures would be applied retroactively from September 1, he said.

The French premier also reiterated a promise made by Chirac in 2004 to cut property taxes on non-developed farmland by 20 percent, a measure that represents fiscal aid of 140 million euros.

Finally, Villepin also said he would soon call for bids to build a 300 megawatt biofuel electricity plant, which uses agricultural waste as its energy source, and said his goal is for biofuel to represent 5.75 percent of France's total energy consumption by 2008, two years ahead of the target called for by the EU Commission.

By 2010, biofuel sources should generate seven percent of the country's electricity use, rising to 10 percent by 2015, he said

related report
France offers fuel price relief
By Elizabeth Bryant
PARIS (UPI) Sep 13, 2005 Faced with soaring oil prices and rising consumer discontent, the French government is sounding one new prescription among a mix of others: It's time France starts seriously looking at energy alternatives to hydrocarbons -- and at reducing its energy consumption.

That message was sent most clearly by French Prime Minister Dominique de Villepin as he unveiled measures Monday and Tuesday aimed at taking the worst bite off fuel prices at the pump and elsewhere.

"Each one of us must integrate in his behavior the changes (in fuel prices) and therefore diminish his consumption," de Villepin said Monday as he fielded questions from listeners on Radio Monte Carlo.

On Tuesday, the prime minister moved up a series of target deadlines for the production of biofuels - like ethanol, derived from crops. By 2008, biofuels should make up 5.75 percent of total fuel consumption in France, and 10 percent by 2010.

"Biofuels are critical at a time when we are trying to reduce our fuel consumption," de Villepin said in the French city of Rennes Tuesday, in his first major address to the nation's farmers. "They also contribute to the fight against greenhouse gas effects" partly produced by hydrocarbons consumption.

De Villepin has also sent a similar message to oil companies, urging them to focus on ways to reduce energy dependence on oil.

France's go-green message is only part of a mix of measures aimed at tackling fuel prices that have risen by 50 percent at European pumps this year.

Among others laid out by de Villepin Tuesday: increasing tax refunds on fuel and natural gas consumed by French farmers, and reducing taxes on 50 percent of their heavy fuel oil purchases. The French Prime Minister also suggested other tax-lightening measures - this time targeting taxi drivers - and said deep sea fishermen will also receive preferential fuel tax treatment.

The new measures reflect efforts by governments across Europe to tackle the spiraling price of fuel - made even higher by hefty taxes many slap on to boot.

In Britain, fears of fuel blockades by protesting farmers, truckers and others have sparked panic buying at pumps across the country. Belgium and Italy are braced for similar protests this week.

In France, angry truckers and farmers demonstrated in the northern town of Arras. And French trade unions are planning a massive, countrywide demonstration Oct. 4 to protest the weakening of consumer purchasing power, in part because of the hefty hike in fuel oil prices.

Finance Minister Thierry Breton is expected to press oil companies to further reduce their pump prices, during meeting scheduled Friday. The companies agreed to a first cut last week. And at a meeting of European Union ministers last week, Breton also suggested taxing oil companies to help ease the pressure of the price hike on consumers for oil that peaked at $70 a barrel this summer.

The high prices bring back not only the specter of the gas crunch of the 1970s, but also massive fuel-price-related protests in Europe just five years ago that paralyzed parts of the region, including France.

But critics suggest de Villepin's center-right government is merely offering piecemeal reactions to the fuel price hike rather than a workable, comprehensive strategy.

"It's time to relaunch economic and research programs that can finally find cost-effective energy alternatives," Le Monde newspaper wrote in an editorial Monday. "For the moment, neither solar, nor wind energy fit this category, and biofuels remain too expensive."

Fuel represents 3.4 percent of household spending in France, according to the statistical agency Insee, but that figure is expected to increase this year.

Overall, crude oil accounts for roughly 36 percent of energy consumption in France. The country is a heavy user of nuclear power.

But environmentalists argue the government has not focused enough on developing other, less controversial renewable energies such as wind power.

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