Australia: Petrol hits $1 and consumers are fuming

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Petrol hits $1 and consumers are fuming By Michael Bachelard and Nigel Wilson 11sep00

PETROL prices broke the $1 per litre mark in metropolitan centres again at the weekend before edging down in a pattern motoring groups say is causing increasing frustration for consumers.

The price of unleaded petrol fell back to about 94c in Sydney and 97c in Melbourne yesterday from peaks of more than $1 on Friday. NRMA spokesman Marzi de Santi said motoring clubs were watching a meeting of OPEC nations this week, hoping they would increase oil production.

The crash in the Australian dollar was also contributing to high petrol prices, he said.

Royal Automobile Club of Victoria spokesman David Cumming said the motoring organisations' campaign for government action would step up a notch this week.

The RACV will publish the names and addresses of all federal parliamentarians and call on members to lobby them to stop the next indexation of prices in February. In Western Australia, the Royal Automobile Club will publish postcards for members to fill out and send to politicians.

The news came as it was revealed the Government would make a $500 million windfall tax gain out of the rise in international crude oil prices.

But while public attention has focused on petrol prices, it is the rapid rise in diesel that may have a greater affect on inflation. Diesel prices have risen 25 per cent since the beginning of August and in Sydney last week was selling at $1.03 per litre.

Diesel production is directly related to heating oil and the shortage of heating oil is driving the oil price higher.

The market is predicting a cold northern winter and a shortage of refinery capacity to meet demand.

Bryan Nye, of the Australian Institute of Petroleum, said the crude oil rise had resulted in the landed price of diesel in Australia increasing to 49.1c per litre from 37.5c per litre at the beginning of August.

Roy Masters, of the Transport Workers Union in NSW, said owner-drivers were screaming at the increase and the failure of the Government's diesel tax rebate system, designed to smooth out city and country prices.

Drivers' margins were being squeezed and there was no relief in sight.

Resources giant BHP said fuel costs for its huge Pilbara mines, where it uses 120 million litres of diesel per year, had increased 48 per cent in three months.

Peter Lalor, chief executive of leading goldminer Sons of Gwalia, said diesel was costing the goldmining industry "tens of millions a week" in extra costs.

But the Government is resolutely against ending world parity pricing for Australian oil products and dropping excise indexation.

Industry Minister Nick Minchin said that to do so would destroy the Australian oil and gas industry and thousands of jobs.

http://www.theaustralian.com.au/common/story_page/0,4511,1185536%255E2702,00.html

-- Martin Thompson (mthom1927@aol.com), September 10, 2000


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