Govt to scrap rural petrol subsidies...WE get ripped again !
SMH Sunday 16th
"Petrol pump prices rose during
Easter and the outlook for fuel costs is not going to get any better for regional areas as the federal government prepares to scrap a fuel subsidy scheme.
Rural communities currently receive a one to two cent a litre discount on fuel, and up to three cents in more remote areas, thanks to the scheme introduced by the federal government in 2000 to counter the impact of the GST.
The government now believes the $270 million it spends on the subsidy each year can be put to better use to improve country roads, and plans to cut the scheme on July 1.
Queensland will be the hardest hit by its removal and the state's motoring group, the RACQ, is fighting a rear guard battle to retain the subsidy.
The group's general manager for corporate relations Gary Fites said it was a classic case of "robbing Peter to pay Paul".
"We are all for more money going into improving our roads but we believe it should be genuine new money and not money diverted from something we believe has been a benefit to people in the bush," Mr Fites said.
"The government claims that the middle men have been pocketing the money but that's beside the point.
"The day that benefit disappears is the day the industry, in looking to maintain their margins at the very least, will raise its prices between one and three cents a litre."
Queensland state Labor MP Andrew Fraser chaired the Queensland petrol price committee, which unanimously called on the federal government to abandon the plan to axe the subsidy.
"We believe that given the GST will still be around come July 1, this program should be as
well," he said.
Mr Fraser said if rural motorists were given the choice of improved roads or cheaper fuel, they would go for the latter.
"It's a no brainer," Mr Fraser said.
Meanwhile, the two major fuel retailers, Coles Myer Ltd and Woolworths Ltd, are getting ready to cop the flack when the subsidy ends.
Coles has about 600 fuel outlets under its alliance with
Shell while Woolworths has approximately 470
Caltex-branded stations.
With the extra money needed to fill the car, consumers will have less to spend in the supermarkets and at the convenience stores that sit beside the bowsers.
JP
Morgan Securities chief economist Stephen Walters said petrol at $1.26 per litre would suck an additional $8.75 from the weekly budget of the average household.
Assuming Australians do not cut back on the use of their cars there will be less cash available for other retail purchases.
"Spending an extra $9.00 per week on fuel doesn't sound like much, but there are eight million households in Australia," Mr Walters said.
"Extrapolating this additional burden across the whole economy means $543 million will be drained from retail spending in April, or more than three per cent of total retail spending, which was $17.6 billion in February."
If petrol prices reach $1.40 per litre they will bleed more than $700 million from monthly retail sales, or more than four per cent of total sales.
The Motor Trades Association, which represents 7,000 independent service stations, says operators will not be able to absorb the increase in costs when the subsidy finishes.
"With the end of this scheme we would assume any increase in prices will be passed on to motorists, which is unfortunate at a time when fuel prices are high," a spokeswoman said "