The price of fuel includes nearly 50 cents of government excise and taxes, which do not go directly to roads
The price of fuel includes nearly 50 cents of government excise and taxes, which do not go directly to roads

Prices fuelled by govt taxes, excise

By DAVID MOASE

WITH the cost of unleaded petrol now sitting around $1.10 a litre, and diesel close to $1.20, motorists know all too well the price of fuel.

While the high price of crude oil is chiefly responsible for the recent rise in pump prices, tax and excise make up a significant proportion of the cost.

The Federal Government takes 38.4 cents from every litre of petrol sold, while GST, with pump prices as they are, gives the government another 10 cents a litre.

State governments are no longer allowed to apply excises to fuel, so programs such as the 3x3 scheme, which funded road work in the 1980s, no longer exist.

The remainder of the wholesale price is made up of the production cost of the pet- rol and other costs such as terminal fees and wholesaling charges. Service station proprietors then add a mark-up of about three cents a litre.

With the government dragging in about 50 cents from every litre sold, where does that money go?

Revenue from the fuel excise is expected to be $13.4billion in the 2004/05 financial year. Fuel sales in the Coffs Harbour area are difficult to gauge, but a ballpark estimate of 150 million litres a year would make the local contribution to the excise windfall about $60 million.

Rather than going directly towards transport-related issues, excise revenue goes into consolidated revenue.

With that money mixed in with the remainder of the government's revenue, it is impossible to tell how much ends up helping motorists travel more safely by improving roads or taking trucks off the highways.

During the 10-year funding agreement for the Pacific Highway, which runs out in June, 2006, the Federal Government contributes $60 million and the State Government $160 million, making a total package of $2.2 billion.

The Howard Government committed itself at last year's Federal election to raise its contribution to $160 million a year over the three years from next July.

That commitment is likely to become part of a new 10year agreement with NSW currently being negotiated.

The government has also committed $568m to improvements of the rail-line between Sydney and Brisbane, which it claims will see 120,000 transport containers taken off the highway each year.



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