Truckers strike in Europe continues unabated, hits France; China increases fuel prices, US welcomes decision
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    • The truckers strike across Europe continued unabated. Countries affected included Britain, Spain, Belgium, and France. French truckers on their part attempted to block roads across the country on June 16 demanding government measures to offset the soaring price of diesel fuel1.

    Meanwhile, China became the eighth country in Asia to increase domestic fuel prices - a move that international pressure groups, environmentalists and civil society activists had been clamoring for to correct market distortions and curb demand. Faced with severe fuel shortages, Beijing raised the retail price of diesel by 18 percent, to the equivalent of $3.58 a gallon, the price of petrol by 16 percent, to $3.83 a gallon, along with increases in electricity tariffs and in the price of jet fuel2. The announcement had an immediate impact on world oil prices which dropped by $4.

    China however now finds itself in a fix that India too has been trying to wriggle itself out of, for the past few months. While an increase in the fuel prices was long overdue and had to be implemented in the present global energy scenario, the resultant impact on the escalating inflation would have a cascading impact on its economy. Reports noted that inflation in China, which was touching 8 per cent, coupled with the increase in fuel prices would have a negative impact on the Chinese exports and on the summer harvest.

    US government officials meanwhile welcomed the Chinese decision to revise its fuel prices, a move they had been advocating for long but dismissed suggestions that they had influenced the Chinese decision in any manner. Prior to the announcement, American Treasury Secretary Henry M. Paulson Jr. held talks with Chinese authorities on June 17-18.

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