Europe split over oil price plan

European Union leaders have agreed to a 3-month study to find ways of cushioning the impact of soaring energy prices on the region's citizens.

At an energy summit in Brussels, ministers discussed plans to ease the pain of record oil and gas prices on consumers and companies.

They asked French President Nicolas Sarkozy to report back to the commission with a plan by October.

The plan follows protests across Europe by farmers, truckers and fishermen.

But opinion was divided about what action the European countries should take.

European Commission President Jose Manuel Barroso said there were no easy solutions.

"We have sent out a very clear message that there will not be a quick fix for the issue of the oil prices," Mr Barroso said.

The EU wants to prevent another spate of militant action across the region, but there is little common ground on exactly how to tackle the oil prices spike.

France had proposed to cap Value Added Tax (VAT) on fuel, a plan that was rejected by Germany.

President Nicolas Sarkozy said: "I will not give way, I will fight for the issue."

"It is a case of justice," he added.

'Cool response'

The Italian government has introduced a windfall tax on oil companies, with the money being redistributed to the needy.

This plan received a cool response from other EU nations, who said it was difficult to decide who should get the money.

Meanwhile, oil companies complain the tax will prevent them from reinvesting their profits into further exploration.

In the official concluding document of the summit, European leaders said they would support investment in energy efficiency and the use of renewable energy resources.

But they stopped short of backing France and Italy's radical proposals.

EU Energy Commissioner Andris Piebalgs told the BBC: "There are already EU directives which can be used to help the most vulnerable families to counter the effect of high fuel prices.

"Heads of government should agree to restructure some industries so that they can respond to higher oil prices," he said.

The meeting comes as key energy consuming and producing countries meet this weekend in Saudi Arabia to discuss the volatile world oil market.