Fed: Howard take no action on petrol prices

AAP General News (Australia)
08-18-2000
Fed: Howard take no action on petrol prices

CANBERRA, Aug 18 AAP - Prime Minister John Howard today ruled out any action on petrol
prices, saying the government would not cut excise.

Pump prices reached $1.04 a litre in some parts of the country this morning, including
Canberra, as world oil prices hit a 10-year high.

But state premiers, motoring organisations and the opposition have also blamed the
GST for rising prices.

Queensland Premier Peter Beattie today called for the competition watchdog to be wound
up because it had failed to investigate fuel price fluctuations.

Mr Howard rejected Mr Beattie's criticism, saying even the government's critics said
the GST added no more than 1.5 cents a litre to the cost.

"Overwhelmingly the movements in price are driven by the world price of petrol," he
told Melbourne radio 3AW.

"I know it's easy for state premiers and motoring organisations and everybody to call
for something to be done.

"The ACCC (Australian Competition and Consumer Commission) is in my opinion is discharging
its role quite effectively."

Mr Howard said there were only two options - to move away from world parity pricing
or to cut excise.

But he said it would cost an astronomical sum to cut excise by five cents, enough to
make any difference at the pump.

"I know how sensitive petrol prices are to Australians," he said.

"I'm very much aware of that but we can't control the world price. It would be a big
policy mistake to move away from world parity pricing.

"The other alternative is to cut excise and if we take the hundreds of millions of
dollars required to make a difference, you've got to take that out of something else."

Asked whether he was comfortable that 50 cents out of every dollar spent on petrol
was going to tax revenue, Mr Howard conceded it was a large amount but said governments
needed revenue from somewhere.

He did not accept that the GST had added to the price of petrol.

"I do feel very strongly that the main reason for the rise in the price of petrol at
the bowser is that the world price is higher now than what it was six months ago," he
said.

If the world price came down, pump prices should also drop, he said.

AAP mfh/cd

KEYWORD: PETROL HOWARD

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