Australian Petrol Prices: What Is The Future?Australian petrol prices have been rising steadily over the last decade. They have spiraled from an average of 66 cents per litre at the start of 1999 to over $1.35 per litre on average in February 2008 as everyone who drives a car is well aware. What is the future of the price of this essential commodity?
Peak Oil facts indicate that global production of crude oil is currently struggling to keep up with demand and may well already have fallen below the level needed to sustain current usage. This is a serious problem, as our energy needs are continuing to increase annually as are the needs of all countries. Reducing Petrol Taxes Regardless of whether we have reached peak oil production yet or not, the increase in global demand for oil will continue to push Australian petrol prices upwards. It is not realistic to expect the Government to reduce its excise on fuel, which is currently 38.1 cents per litre for unleaded petrol, for the following reasons. Firstly, the revenue raised from petrol comprises 6% of the Australian Government's revenue raising efforts. This is a significant chunk of the available funds for the maintenance of the country's infrastructure. A cut in petrol excise would have to be compensated for in other areas, such as a rise in the level of personal income tax. A breakdown of Australian Government tax revenue is shown below:
Secondly, making Australian petrol cheaper would make it more appealing for international trade. Oil companies would be unlikely to sell petrol to consumers here if it would fetch a better price overseas. If cheaper Australian petrol was sold overseas, the remaining fuel would be limited and may even require petrol to be imported as a result, again raising the price. Reducing Petrol Use Higher prices provide all consumers with the incentive to reduce their consumption. This drives down private vehicle use which will in turn produce less Carbon Dioxide and other greenhouse gas emissions. This is in all our best long term interests as this will need to be done in order to reduce the risk of climate change. The knock on effects from this will be significant for the Australian economy as approximately one third of all businesses are related either directly or indirectly to the automotive industry, however with the inevitibility of peak oil this cannot be avoided. Better Public Transport One clear and pressing need is for a more efficient public transport system in the Capital cities of Australia. It is not unreasonable to argue that the Government should increase the excise on fuel even higher and use the resulting funds to build more train lines and purchase buses that use either fuel cells of < a href="http://www.green-planet-solar-energy.com/the-element-hydrogen.html">Hydrogen gas for power. Building this and making it affordable to all commuters is a sensible approach to dealing with the spiraling price of oil.
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