Fuel price protest paralyzes Peru

LIMA, Peru (Reuters) -- Bus drivers in Peru's capital on Monday joined a nationwide truckers strike in protest of high oil prices that has already choked off fuel and food supplies and wreaked havoc in Lima and other key cities.

Thousands of Peruvians were forced to walk to work while others lined up at gasoline stations to stockpile fuel that has already begun to run out after six days of a strike to demand lower fuel taxes and lower highway tolls.

In the face of soaring international oil prices that hit decade highs last week, truckers and urban transport workers in Lima were demanding officials eliminate a tax union leaders claimed is as high as 50 percent. Although international prices dropped on Monday, the shortage of fuel in Peru's main cities was still forcing up prices domestically.

"We can't survive with the high fuel costs," said Joaquin Ormeno, president of the Confederation of Public Transport of Peru. "We can't continue subsidizing public transport out of our own pockets."

The government has said it cannot meet demands which would compromise its tough fiscal austerity drive. Talks between officials and union leaders broke down over the weekend.

The government managed to break through a line of trucks blocking the country's main refinery late on Sunday night, but as of Monday it had still not distributed the much-needed fuel. They also towed some of the thousands of trucks that have lined highways around the country.

Union leaders said they will maintain the strike until their demands are met.

On Saturday, Exxon Mobil Corp.'s Peru office said 30 percent of its gasoline stations across the country had run out of fuel. Peru's Association of Gas Stations said the number of affected stations would continue to climb.

The strike hit Peru at a time when President Alberto Fujimori was struggling with the biggest political crisis of his 10 years in office. After a video aired nationwide showed Fujimori's right-hand man allegedly bribing an opposition lawmaker, the president announced new elections in which he will not run.

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