Temporary petrol tax relief can’t last forever – RAA

If you think $2 a litre for petrol is expensive, the RAA says it’s going to get worse – but there is something that could be done to ease the pain.

Any ongoing fuel-tax relief should be directed to those in the community who are hardest hit by spiralling prices, a leading motoring group says.

RAA fuel expert Mark Borlace said the halving of the federal government’s tax take of 44c/L had been put in place only until September because the previous government knew it was not sustainable.

The incoming government has made no decision on what to do with the cuts beyond September, but Mr Borlace said the measure was removing $500m a month from federal revenue.

“The cut to the excise was very blunt and we think they may have approached it a different way if there wasn't an election looming,’’ Mr Borlace said.

People are struggling to fill their tanks Picture: NCA NewsWire/File

“We say leave the fuel tax in place and give targeted assistance via the mainstream tax system to those parts of the community that are most affected.

“So regional transport companies, low-income earners and so on.”

Adelaide’s combined diesel and unleaded petrol prices hit a high last week, with motorists paying an average of $2.09/L

Australian Institute of Petroleum figures show only Brisbane motorists paid more last week, $2.11/L on average, and the national average for metropolitan areas was $2.05/L.

“We are also concerned about the pain that will happen when the tax goes back to normal, when you can add 24c/L to fuel overnight,’’ Mr Borlace said.

“We have asked the ACCC to watch when the full tax comes back in, then it should be passed on quickly.”

On Tuesday, Acting Prime Minister Richard Marles would only say that the cost of petrol was “difficult” for Australians.

He said the country was facing “a cost-of-living crisis”, which the newly elected government was trying to fix.

RAA fuel expert Mark Borlace speaks to the media. Picture; Mark Brake.

“That doesn’t happen overnight … but the job does start overnight,” Mr Marles told ABC radio.

“This is a big challenge for the country and you can’t repair a decade of economic neglect – which we’ve seen under the former government – in a week, but we are going to start the job today.”

Uniting Communities spokesman Mark Henley said people on low incomes were in desperate need of cheaper travelling costs and better public transport.

“Perhaps an alternative option, if petrol prices stay high, is to invest much of the petrol tax into better and more frequent public transport,’’ he said.

Mr Henley also suggested a lower fuel tax for people in regional districts, compared to areas within 100km of a capital city.

“This targets some relief to regional communities where people must drive further.

“There needs to be an urgent plan to make electric vehicles more accessible, including for lower-income households.”