EU to propose energy tax breaks to help the poor

By Pete Harrison

BRUSSELS (Reuters) - The European Commission will look at changing taxes to boost energy efficiency and help poor people hit by high fuel costs but will tread carefully over the possibility of so-called "Robin Hood taxes", a spokesman said.

The main policy response to soaring fuel costs must be energy efficiency to reduce dependence on imported fossil fuels, the European Union's executive arm said.

"Rising fuel prices are squeezing the purchasing power of all EU citizens, with the strongest impact on the lowest-income families in Europe," Commission President Jose Manuel Barroso said in a statement.

"I believe that through a structured response at the EU level -- possibly combined with targeted social policy measures by member states -- we can meet the challenge," he added. "We need to save energy, and to diversify the sources of supply."

The European Union executive said it will urge member states at a summit next week to take "targeted measures to help citizens that are hardest hit by the current situation".

Soaring oil prices have sparked protests in Europe and Asia. Many protesters blame high duties on fuel imposed by their governments as much as international oil prices.

The Commission said prices had risen largely because oil supply was struggling to keep pace with rising global demand, especially in China and India.

It said household heating fuel costs had risen 35.2 percent in the EU in the year to April, with transport fuel up 12.7 percent. It was also looking at the impact on fisheries, agriculture, transport, chemicals, automobile and renewable energy sectors.