Australia: Petrol tax windfall

www.heraldsun.news.com.au By KAREN COLLIER, consumer reporter 06mar03

VICTORIAN drivers are filling petrol tax tanks to the tune of $2.4 billion a year. Motorists using unleaded, lead replacement or premium fuel are paying almost $2 billion in excise and at least $400 million in GST, figures prepared for the Herald Sun reveal.

The tax-grab details, based on industry sales and government revenue data, were released amid calls for the Federal Government to ease the pain of drivers paying record high prices.

Peak unleaded petrol costs have bolted past $1 a litre in recent weeks as increasing oil and wholesale petrol costs flow through to the bowser.

The RACV has warned sustained high prices would damage the economy. It wants the Government to cut excise if there is no relief soon.

Fuel excise and GST swallow almost half the cost of every litre of petrol sold. In Victoria, on a litre of petrol costing $1, the excise was fixed at 37.7c. GST grabbed 9.09c.

Victorian drivers use 5.2 billion litres of petrol in a typical year. This is about one quarter of the Australian market.

Nervousness over a looming war with Iraq and a strike in Venezuela have added 10c a litre to pump prices since the start of the year.

Unleaded fuel costs at Melbourne service stations were yesterday 94.5c to 105.9c. The RACV said the average was 96.9c.

Motoring bodies say rising oil prices pump more GST into government coffers and increased the tax take from a resource rent tax levied on oil producers.

RACV government relations manager David Cumming said motorists were being treated as cash cows and were victims of war jitters.

"The Government can clearly afford to give tax relief if petrol prices do not start falling," Mr Cumming said.

The RACV said if prices kept rising, the Government would reap a tax windfall of up to $750 million a year nationwide.