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Get used to high fuel prices!

High octane: Melbourne fuel is now often priced above $1.20 per litre.

RACV says get used to high fuel prices and calls for government to cut GST on fuel

General News logo25 Aug 2005

By NEIL MCDONALD

WORRIED about high petrol prices? Well, get used to it.

That is the message from the RACV as rising global demand for petrol and supply shortages push Australian fuel to $1.30 a litre at the petrol pump.

The motoring organisation believes high fuel prices are here to stay until the end of the year, and according to government relations manager David Cummings, they could remain high for at least for the next 12 months.

This has prompted the RACV to renew its call for the state and federal governments to adjust GST legislation to remove that portion of the GST being charged on the fuel excise.

"It’s an absolute disgrace, we all know that," Mr Cummings said, describing the anomaly as a tax on a tax.

He claimed that if governments removed it, the price of fuel would drop by more than three cents a litre. However, governments were collecting more than $300 million a year with the extra GST, he said.

Mr Cummings said he was a "voice in the wilderness" about the anomaly as he is one of the few agitators for the situation to be resolved.

80 center image"There has been a little bit of pressure brought to bear to try and shut me up," he said. "The Federal Government doesn’t like this sort of attention." High petrol prices are also having a direct impact on buyer habits and alternative fuels.

"It will take some time before we find a trend, but we do know that LPG conversions have increased by 25 per cent this year," he said.

"I will (also) be very surprised that small-car sales didn’t increase, particularly next year." According to VFACTS industry figures, light-car and small-car sales now represent 30 per cent of overall sales. Ford Australia spokesman Edward Finn said demand for the dedicated-gas Falcon had increased 40 per cent this year over 2004.

In year-to-date terms, Ford has sold 4310 dedicated-LPG Falcons, up from 2992 last year.

However, it makes up a small portion of overall Falcon sales, with more than 31,100 sold YTD.

Ford is not the only car-maker offering LPG. Toyota and Mitsubishi have units available and Holden is believed to be working on an LPG version of its VE Commodore due next year and Mitsubishi is believed to have a dedicated LPG 380 up its sleeve.

Despite the growing popularity of alternate fuels, Mr Cummings does not subscribe to the doomsayers who believe oil supplies are running out.

"I don’t believe that," he said. "If you talk to the oil industry their gut feeling is that Iraq has twice the amount of oil that’s been found."

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