In his budget announcement, treasurer Joe Hockey has indicated that the government will increase the fuel excise in line with inflation twice each year. The excise, currently 38.143 cents per litre, has been in place since John Howard's Coalition government ditched indexation in 2001 to offset the price hike caused by the introduction of the goods and services tax (GST). With no increase to the fuel excise in more than a decade, it is now about 39% lower than it would otherwise have been. Put another way, if petrol prices had been pegged to inflation since 2001, we would have been paying an average of about 205 cents per litre by 2013. It is therefore not surprising that Australia now has some of the lowest petrol prices among the 34 members of the Organization for Economic Cooperation and Development (OECD). In fact, only three OECD countries - Mexico, the United States and Canada - have lower petrol prices than Australia.

Publisher: The Conversation

Region: Australia

Type: Article

Petrol prices are in the way up, but don't blame the fuel excise
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Petrol prices are in the way up, but don't blame the fuel excise