News

Petrol Prices, Damned Lies and Statistics

24.11.1999

The ACCC report into petrol prices released by the Minister for Financial Services and Regulations, Joe Hockey, obscures some important facts, according to the Executive Director of the Australian Automobile Association, Mr Lauchlan McIntosh.

 

"Although the report and the Minister's Press Release indicate that motorists had not been exploited by petrol stations in the period January-August this year, the situation is quite the opposite if the period February-August is selected for analysis" said Mr McIntosh.

 

According to the ACCC report, the Import Parity Indicator rose by 11.97 cents/litre whereas the average unleaded petrol prices in the capital cities rose by 13.15 cents/litre. Thus more than the full impact of international prices was passed on to motorists in this period.

 

"And, although the report notes that the average city-country petrol gap had declined by 1.9 cents/litre, AAA analysis shows that there is still a number of towns where the gap had widened" reported Mr McIntosh.

 

Mr McIntosh stated that the narrowing gap was pleasing and that it had been brought about by increased competition, particularly from Woolworths. However, he singled out Albury-Wodonga as a town where the gap had widened and where Woolworths was surprisingly not present.

 

Mr McIntosh also noted that the information released by the Minister disguises the fact that the Government collects over 43 cents/litre from fuel excise, and that excise has increased through indexation by nearly half a cent/litre this year.

 

"This indexation alone raises $90 billion from motorists in a year", said Mr McIntosh "and it is time the Government abolished indexation and returned a larger amount of revenue to roads and road safety."

 

 According to ANOP research commissioned by AAA and released last week at the AAA Annual Conference, motorists are outraged by the little amount of fuel tax revenue which goes to roads. "It is time this changed" said Mr McIntosh.

 

He also stated that when the GST is introduced next year, the Government will need to reduce excise by 8.9 cents/litre in order to keep petrol prices largely unchanged in regional and rural Australia, where according to the ANOP research, motorists are hurting.

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