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Petrol Prices Jump by up to 5.7 Cents a Litre in February

14.3.2000

The Australian Automobile Association has released the latest monthly survey of petrol prices across Australia, which shows an average increase of 3.5 cents a litre during February.

 

The Executive Director of the Association, Lauchlan McIntosh, said that while the average rise was 3.5 cents was bad enough, in some areas prices increased by as much as 5.7 cents. He said the increases were caused by a combination of a government fuel excise increase and increases in world oil prices.

 

Mr. McIntosh said motorists were already paying too much for petrol and his organisation had serious concerns about the impact of the introduction of the GST on petrol prices.

 

"The Prime Minister has given an undertaking that petrol prices will not increase as a result of the GST and we welcome that, however the Government has not indicated just how it will meet this commitment," Mr. McIntosh said.

 

"The original proposal from the Government was to reduce excise by a set amount and then apply the GST which would have resulted in a greater disparity between city and country prices.

 

"There are now suggestions that the Government is looking at some sort of rebate system similar to that which operates in South Australia. The AAA would be deeply concerned if the Federal Government is planning to use a system similar to the South Australian one because we do not believe it will benefit country motorists.

 

"The AAA has carefully examined the South Australian system, which subsidises fuel sold in country areas, and can find little evidence that it works. The South Australian Government is certainly paying a rebate to fuel wholesalers but the rebate does not seem to be finding its way to motorists.

 

"We're also concerned about the inflationary effect of the GST. The current higher fuel prices we're experiencing will increase inflation, which impacts on the indexation of excise. It's now expected the CPI will rise by at least 5.5% in the first year of the GST. That sort of rise will push petrol prices up by at least 2 cents a litre, as a direct result of the introduction of the GST.

 

"It is time the Government removed the uncertainly surrounding fuel prices and spelt out the details of just how it intends to meet its commitment of not increasing petrol prices as a result of the GST," Mr. McIntosh said.

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