ACCC says fuel consumption cuts are driving down petrol prices
The The Australian Competition and Consumer Commission (ACCC) said the fuel excise tax cuts announced in the Federal Budget last week are largely being passed on to customers, thus lowering gasoline and diesel prices as designed.
The government-backed watchdog says its petrol price monitoring has found retail prices in major cities drop significantly a week after the fuel consumption cuts went into effect, while Time added that it will continue to monitor service station pricing.
It states that between March 29 and April 5, 2022, the average daily price of regular unleaded petrol fell from 25 cents/liter (c/pl) to 27 c/pl in Sydney, Melbourne and Brisbane , about 31 c/pl in Adelaide, and before 35 c/pl in Perth.
Prices have also fallen in Canberra, Hobart and Darwin, between 19 and 24 cp/l so far, while prices in many regional centers are also lower. In Cairns and Launceston, for example, gas prices fell about 24 c/pl, and Armidale fell 15 c/pl in a week.
The ACCC added it also saw a drop in diesel prices in many locations reflecting excise cuts, “but not by as much as gasoline”. This may reflect that diesel sales are generally longer than gasoline sales, at least for service types that don’t have a truck compartment.
The excise tax cut is 22 cents per liter, so it’s clear that this claimed fuel price cut is also due to other factors such as international refined gasoline prices and exchange rates.
“In the coming weeks, as gas stations run out of paid-for fuel stocks, we expect the reduced wholesale prices to be passed on to dealers everywhere,” said ACCC Chairman. Gina Cass-Gottlieb said.
“…Despite various factors that affect fuel prices, our analysis clearly shows that a major part of the reduction in excise consumption has been realized in the major capital cities.
Ms. Cass-Gottlieb added: “…It will take some time for lower-turnover gas stations to use up their existing gasoline and diesel stocks, and to replenish fuel at reduced wholesale prices that can take into account the reduction of excise tax.
While the temporary cut of the fuel excise tax from 44 cents to 22 cents per liter was welcomed by the car industry, both the top-level body for car brands (FCAI) and the high-level body for dealers (AADA) who want much deeper reform to vehicle taxes in general.
The FCAI says now is the right time for policymakers to consider a broad-based toll scheme that “will replace a range of outdated and inefficient tolls”.
“Since the release of the FCAI discussion paper on toll collection from pedestrians, Several State Governments have announced plans introduced road user fees to electric vehicle owners as part of their zero-emissions strategy. Our view is that Governments can take this a step further and introduce a pedestrian fare to all vehicles, regardless of their engine type,” said Chief Executive Tony Weber. .
“Importantly, the road use fee is not an additional tax on motorists. Instead, it can replace a multitude of fees such as registration, fuel license fees, luxury car taxes, and sales taxes.
“Reducing complexity also provides an opportunity to reduce the large bureaucracies needed to manage these taxes and fees inefficiently, providing additional economic benefits.”
“State and Territory Governments are beginning to adapt to the changing nature of mobility in Australia, including the rise of no-cost electric vehicles. Wider adoption of the RUC and the elimination of taxes such as fuel consumption and luxury car taxes will ensure that all motorists are paying a fair amount to use Australia’s road network.
“…Clearly the details need to be carefully considered to ensure any program considers its fair application to motorists across the country. This is especially important considering rural and regional tourism, the Australian way of life and our tyranny of distance”.
“We need this reform to transform Australia’s road tax system from the last century and get ready for the future of the auto industry. Australians want a future that can provide clarity, simplicity, fairness and value to their wallets. There is no better time than now to make this future a reality.”
AADA also called on the government to commit to reforming the tax structure in the auto industry.
“While [the] The budget copes with the current cost of living pressures that so many car owners go through, we urgently need a national plan for the major changes facing the auto industry”, Director AADA executive James Voortman said.
“Prior to the reintroduction of the full excise tax in September 2022, the Government should consult widely on reforming this heavily taxed sector.
“Agents customers provide tens of billions of dollars in taxes annually to federal, state and territory governments. Halving the fuel tax for motorists for six months should relieve some pressure in the short term, but what is urgently needed is a review of the car tax system in Australia.
“This budget shows that motorists will have to pay billions of dollars in taxes, such as import taxes, luxury car taxes, ancillary taxes, GST and excise taxes. With Australia no longer producing passenger vehicles and with the advent of low-emission vehicles (LEVs), the question is whether our current car tax regime is in line with this. purpose or not.
“This is a time of tremendous change in the auto industry, and we are seeing state and territory governments go their separate ways on important issues such as supply and demand. offers incentives for LEVs, vehicle taxes and tolls. We simply need national leadership.”
THAN: Government to cut fuel consumption in half in six months