The Government is set to reintroduce fuel tax indexation, which was scrapped in 2001, in a move which will hike petrol prices by about 1c per litre in each of the next four years.
According to the article on The Australian, the reintroduction of fuel indexation will result in $250 million in revenue in the 2014–15 FY, and approximately $2.4bn over the four year period.
For common petrol users, the increase in fuel tax means that it will cost about 50c extra to fill a tank for a small motor vehicle in the first year rising to about $2 a tank after four years.
This equates to about $26 a year for a family that filled their car up once a week in the first year but it will increase to more than $100 a year in the fourth year.
The news for reintroduction of fuel indexation did not sit well with motoring groups who warned the Government that it will face a massive backlash if it decides to increase the fuel tax.
Australian Automobile Association Chief Executive Andrew McKellar said a rise in fuel taxes would be a breach of the Government’s election promises and a hit to motorists.
“We are very concerned. A hike in fuel taxes at this point is completely unjustified. Motorists are already paying too much tax. I think there is a real comparison between this issue and the carbon tax. The previous Government (chose) to exempt household purchases of fuel,” Mr McKellar said.
“So for this Government to be applying a new tax on fuel seems to be completely contradictory.”
Australian Trucking Association Communications Manager Bill McKinley said a rise in the fuel excise will not reflect to grocery prices, as trucking companies have received a rebate on fuel excise on any tax paid above a road user charge determined by the National Transport Commission.