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France Enacts Measures to Lower Fuel Costs

French Prime Minister Dominique de Villepin announced measures Tuesday to help French farmers cope with skyrocketing gasoline prices. Besides cutting fuel taxes, the government aims to reduce overall consumption by focusing on energy alternatives.

In his first major address to the nation's farmers, Prime Minister de Villepin laid out initiatives to ease the soaring price of fuel that has hit them hard. Among them: offering bigger tax refunds on fuel and natural gas they consume, along with cutting 50 percent of taxes on heavy fuel oil purchases.

The French prime minister announced another measure likely to directly help them: increasing the production of biofuels - gasoline and diesel substitutes like ethanol, which are produced from crops.

Mr. de Villepin said that biofuels are critical not only to reducing gas consumption, but they also help fight greenhouse effects, or global warming. He said the French government would encourage the production of biofuels by speeding up a series of targets for their use. By 2008, he said, biofuels should contribute more than five percent of France's total fuel consumption, and 10 percent by 2015.

Mr. de Villepin has urged oil companies to reinvest some of their revenue in ways that may help reduce dependency on oil. On Monday, the French government also announced tax cuts for truckers. But it also urged the people to conserve energy.

The new French measures reflect efforts by governments across Europe to grapple with soaring fuel costs and widespread public anger over pump prices, which have risen almost 50 percent this year. Hurricane Katrina in the United States has contributed to the increase.

The high costs - made even higher by hefty taxes - have sparked protests by truckers and farmers in France. Similar protests are expected this week in Britain, Belgium and Italy. French unions have also scheduled a massive, day-long strike October 4 to protest the decline in consumer purchasing power, partly because of the high price of fuel.