Drop VAT on oil says Sarkozy

President Nicolas Sarkozy has called on EU countries to suspend VAT on fuel to help citizens and businesses cope with soaring prices.

He said: "I want to ask the question to our European partners. If the price of oil continues to increase, should we not suspend the VAT taxation on the price of oil.”

In France, consumers pay about 19.6 percent European VAT on the price of oil, which Sarkozy said had doubled since he took office last year to reach more than $130 per barrel.

Sarkozy suggested that EU leaders could set a cap on the tax, based on the barrel price but admitted that his hands were tied to push the measure through.

He said: "It is out of the question to promise this, because naturally, I can't decide it on my own.

"France is not the only country confronted by the rise in the price of oil."

France is to take over the presidency of European Union in July.