BLOCKADE SPARKS PANIC AT THE PUMPS AND IN STORES

UNCLAS SECTION 01 OF 02 LISBON 001402

SIPDIS

E.O. 12958: N/A
TAGS: ECON PGOV ELAB PO
SUBJECT: BLOCKADE SPARKS PANIC AT THE PUMPS AND IN STORES

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Summary
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1. (U) A three-day truckers' blockade protesting rising fuel
costs triggered panic gas purchases as people flocked to fill
their gas tanks before the supply ran out. The blockade,
which began on June 9, visibly affected southern Portugal,
including Lisbon. After just 48 hours, several supermarkets
ran out of staples and the airport had to reroute some
flights due to lack of refueling capabilities. The GOP
continued to negotiate with the truckers throughout the
protest. As a result of the good faith that GOP negotiators
showed during talks, the truckers agreed to suspend the
blockade and return to operations on June 12 while sector
relief package negotiations continued. End summary.

Not going to take it anymore!
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2. (U) On June 9, roughly 5,000 independent truckers and
employees from 75 transportation companies blocked roads
throughout Portugal in a move coordinated with Spanish and
French transporters. The National Association of Public Road
Merchandise Transporters (Antram),which coordinated the
protest, said the move aimed to secure government relief from
rising fuel prices. Antram announced that, due to the price
increases, Portuguese truckers' real purchasing power had
declined by 3.9% this year and 9% over the last five years.
Antram announced on June 10 that the protest would continue
indefinitely, despite the reportedly attractive proposals
that the GOP offered the group, but agreed on June 12 to
suspend the blockade and return to operations while
negotiating.


3. (U) Antram was likely emboldened by the GOP's June 3
concessions to the fisheries and agricultural sectors. Prior
to that, Portuguese fishermen had stopped fishing for four
days and blocked all imports from Spain to protest rising
fuel costs. As a result, the GOP extended a special line of
credit for the affected groups to help bolster liquidity and
address higher production costs.

Panicked? Get in Line
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4. (U) The Antram blockade was joined by several of the
larger transport companies in Portugal and together they
closed off passage through the main north-south corridor,
effectively cutting off a major petroleum supply route to
Lisbon and south-central Portugal on June 9. That same day,
Portuguese consumers began to panic and stock up on fuel; by
June 11, many Lisbon gas stations had run dry, particularly
of diesel (roughly 70% of Portugal's vehicles run on diesel).
Embassy employees observed long lines of up to a half a
mile outside gas stations across southern Portugal and some
gas stations on main roads closed for business.


5. (SBU) Tiago Villas-Boas, an executive from Portugal's
major petroleum company Galp, said the blockade also cut off
supplies to Lisbon's airport, causing several flights to be
rerouted to Porto and the island of Madeira. He added that
the panic buying had worsened the supply crisis. Villas-Boas
confirmed that Galp's supply was unaffected by the protest
but admitted that the blockade had shut down the company's
ability to distribute to almost half of Portugal.


6. (U) In addition to the run on fuel, only two days into the
blockade, major national grocery store chains Pingo Doce and
Jumbo reported a significant drop in the availability of
seafood and produce, and supermarkets in the Alentejo region
announced shortages of water, seafood, red meat, and produce.
Grocery chain owners said even a few more days of the
blockade would cause widespread food shortages, according to
media reports. Unlike the petroleum crisis, the supermarkets
need supplies from a variety of small farmers and fishermen,
so supplies will be limited as long as the blockade lasts.
Minister of Health Ana Jorge confirmed to the press that the
health sector had adequate supplies and was prepared for fuel
shortages.

Let's Make a Deal?
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7. (U) As the fuel panic began on June 9, Minister of
Public Works and Transportation Mario Lino offered several
concessions, including reduced road toll charges, incentives
for updating truck fleets, and a 10% reduction in truck
taxes. The only demand the GOP reportedly rejected was
directly reducing fuel costs for professional transporters.
By June 11, Lino turned up the rhetorical heat, calling for

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the truckers to consider the impact of their actions on
Portugal's economy and the nation in general. Even when
Antram agreed to suspend the blockade while negotiations
continue, it stressed that some of its demands remained unmet.


8. (U) The leftist General Confederation of Portuguese
Workers (CGTP) union, responsible for several recent strikes
protesting Portugal's working conditions, denounced the
blockade. Although the union criticizes the government's
lack of policy proposals in response to rising fuel costs,
CGTP's Public Relations Representative Lucy Moniz told us the
blockade was only making things worse for the most vulnerable
in the economy. Leftist opposition parties, however,
criticized the GOP for "closing their eyes to the crisis" and
called for special measures to reduce the price by capping
the profits of oil companies. Not surprisingly, the public's
reaction to the blockade was largely negative. Several
truckers reported being attacked with stones while sitting in
their vehicles blocking a road. One trucker manning a
blockade was killed on June 10 when he attempted to stop a
truck from passing.

A Good Plan Goes Bad
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9. (U) Comment: Antram's insistence on lower fuel prices in
the face of the GOP's offers has begun to work against it.
The only demand that the GOP has refused was a price discount
for fuel used for transport, since the GOP has no control
over the retail prices and would have to pay for any subsidy
out of the already tight budget. While the public is
generally sympathetic to the sectors hurt by rising fuel
prices, they are even more frustrated with the problems
caused by the blockade. We find it unlikely that the
government will support concessions at the expense of ongoing
economic reforms, especially since it could encourage future
protests in other industries. The GOP is more likely to
create a package of benefits for the transportation industry,
much as they did for fishermen. End comment.
Stephenson