Cut fuel excise – or solve the problem?

Petrol prices

With the price of unleaded petrol now over $2 per litre, the government is signaling a cut in fuel excise but this is no solution to higher prices or reducing transport emissions. 

Here’s why it’s a bad idea:

  • Removing fuel excise entirely would initially cut fuel costs by 44 cents per litre but cost over $20 billion per year in revenue – money that currently helps fund road works.
  • Lower fuel prices would encourage more consumption, reduce the incentive for smaller, more fuel efficient vehicles, for EV take-up, public transport, bike riding and other alternatives.
  • Australia would be more dependent than ever on imported fuel
  • Australia would still have only about 3 weeks supply of liquid fuel in the country
  • Increased volatility and demand for fossil fuels will force the price up again so both the motorists and the budget are both worse off
  • Road congestion will increase costing motorists billions in lost time and extra fuel
  • Greenhouse gas and other pollution with adverse effects on health would continue unabated.

Here’s what might help solve the problem:

Spend $20 billion to help Australians with the cost of transport through:

  • Increased subsidies or tax breaks for EV’s and recharging infrastructure
  • Greater spending on freight rail
  • Greater spending on public transport.

All these measures would make Australia more energy-independent, reduce air pollution and reduce greenhouse gas emissions.

However, this government has, time and time again, backed fossil fuels and short-term popularity over renewables and evidence so there is little chance that the 2022/3 budget will deliver what’s needed.


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