Rudd under the pump as fuel heads for $1.70

HIGHER petrol and food prices are having a bigger impact on households than interest rate hikes, a survey has found.

Fill 'er up ... motorists pounce on comparatively cheap fuel prices / Troy Bendeich

Rudd under the pump as fuel heads for $1.70

PETROL prices have been forecast to soon hit $1.70 a litre, putting further pressure on the Federal Government to act.

The weekly price cycle in capital cities today saw the unleaded price come off record highs of more than $1.62 per litre yesterday, but an analyst predicted the reprieve will only be brief.

"The expectation is for further rises in petrol prices," CommSec equities economist Savanth Sebastian told AAP.

"On the high side of the cycle, within the next fortnight... if the oil price remains sustained at these levels, prices get up to $1.70 a litre."

Opposition finance spokesman Peter Dutton savaged the Government for not doing anything to cut the price.

"Australian motorists are still wondering what the Government will do to give them some relief at the bowser, as the cost to fill up the family Commodore nudges close to $100."

Opposition Leader Brendan Nelson reiterated the Coalition's promise to cut the petrol excise by five cents if elected at the next election.

"It is very important that Mr Rudd understands it is time to take action and simply watching the price of petrol is not going to bring it down," Dr Nelson said.

"Every day from now until the next election, every Australian... needs to know that petrol will be five cents a litre cheaper under the Coalition."

A spokesman for Assistant Treasurer Chris Bowen said there was no change to the timing of the December introduction of FuelWatch - a scheme that will force petrol stations to list fixed prices 24 hours in advance.

Former Shell regional marketing manager turned petrol consultant Kevin Hughes said FuelWatch would do nothing to help motorists.

"There is no evidence at all to support that it's a terrific scheme or gives advantage," Mr Hughes said.

"That's a major issue which will come back to bite them (the Government) because people will suddenly discover (FuelWatch does not work)."

Prime Minister Kevin Rudd said the Government had done "as much as we physically can" to help.
He said tax cuts announced in the Budget earlier this month would help motorists cope with the record prices.

"If you put all those measures together, depending on the family, depending on the number of kids, depending on where they fit in the overall scheme of things, we have done as much as we physically can to provide additional help to the family budget, recognising that the cost of everything is still going through the roof," Mr Rudd said.

A Mortgage and Finance Association of Australia/Bankwest Home Finance Index showed petrol and food prices were hurting people more than interest rates hikes.

Interest rates (three out of five) were ranked lower than both food and fuel (3.5 out of five).

Households were feeling the financial pinch regardless of whether they had a mortgage, association chief executive Phil Naylor said.

"Although many Australians are feeling stressed about their finances, only 8.5 per cent of borrowers said that their levels of stress have increased as a result of the recent rate hikes," he said in a statement.