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Norwegians fume as new 'climate tax' on fuel takes effect

Oil and gas exporter Norway stands to cash in more than 135 billion kroner in extra revenues from its booming oil sector this year due to record high crude prices.
by Staff Writers
Oslo (AFP) July 1, 2008
Norway, which already has some of the highest fuel prices in the world, on Tuesday introduced a new tax on petrol and diesel aimed at curbing climate change.

Although the new charge was no more than 0.05 kroner (0.6 euro cents, 1.0 dollar cent) per litre of petrol and 0.10 kroner per litre of diesel, it outraged many Norwegians, who are already concerned about runaway prices at the pump.

Despite its status as the world's fifth largest oil exporter, Norway has long had high petrol (gasoline) prices due to hefty charges and taxes.

On Tuesday, the petrol price at Statoil stations across Norway inched up to 13.73 kroner (1,72 euro, 2.71 dollars) per litre (quarter gallon).

A poll published by the VG daily indicated that seven out of ten voting-age Norwegians were opposed to the tax increase.

Norway's paper of reference Aftenposten also published a survey showing that a third of the voting-age population expects fuel prices to be the most important question in the next legislative elections in September 2009.

The tax increase is part of a political agreement to dramatically reduce carbon dioxide emissions, signed in January by all parliamentary parties, except the far-right Progress Party.

The deal was part of budget negotiations for 2009, but the centre-left coalition government decided alone to implement the tax six months before that budget kicks in.

"The increase has been made to send a signal that it is important to reduce the climate gases from road traffic," Finance Minister Kristin Halvorsen said in a statement explaining the decision.

The opposition Progress Party, which in several recent polls has ticked in as Norway's largest party with around 30 percent support, has done everything it can to reap more voters from the petrol tax controversy.

Party leader Siv Jensen told VG on Tuesday she was not surprised that most Norwegians opposed the new tax.

"Most people in Norway are dependant on their car. I think a lot of people have trouble understanding why the government is blaming (the hike) on the climate agreement," she said, insisting the government was under no obligation to spend the extra tax money to help halt climate change.

Oil and gas exporter Norway stands to cash in more than 135 billion kroner in extra revenues from its booming oil sector this year due to record high crude prices.

On Tuesday, Brent continued to trade above 140 dollars a barrel, about double the 72-dollar average the Norwegian government had counted on when it drew up its 2008 budget.

The government meanwhile expects to make about 135 million kroner a year on the new climate tax.

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Chinese oil major CNOOC blames supply concerns for price hike
Madrid (AFP) July 1, 2008
Supply and demand concerns are driving the spike in oil prices as appetite for crude in developing nations is expected to soar over the coming years, the president of Chinese oil major CNOOC said Tuesday.

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