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Budget must shift carbon tax load on diesel: ACAPMA

Many options but Moulis foresees only modest changes otherwise to treatment of fuel


Pre-Budget speculation about excise hikes or rebate reductions may have surfaced but a national petroleum products retail group claims there will be few changes to fuel taxation in the next week’s Federal Budget.

Australasian Convenience and Petroleum Marketers Association (ACAPMA) CEO Nic Moulis says that while there has been plenty of speculation it is most likely there will be little action.

“Fuel excise, off-road diesel rebates and ethanol production grants have all been mentioned as potential budget targets,” Moulis says.

“Changes to any of these could have an effect on the budget from $100 million to $5 billion each year.

“These amounts are quite substantial and could relieve the Australian taxpayer of the burdens of new income taxes, like deficit tax.

“It is my opinion, however, that the Government will shy away from changes to fuel charges as no political party wants to be known for directly raising the price of fuel.”

However, Moulis believes the Government should reverse the changes on diesel rebates in the carbon tax.

“As of July 1 this year, the effective cost of diesel for trucking companies will increase by over 6.8 cents per litre,” he says.

“It is estimated to be an additional $500 million in diesel expense in the 2014-15 financial year.

“This compounds within the petroleum marketing industry, where the price of diesel used in delivering fuel adds to the price of diesel.”

Meanwhile, Gas Energy Australia (GEA) used the growing Pre-Budget debate to underline its position on transport fuel.

GEA wants gas to be included in the public dialogue about managing business fuel costs, rather than focus just being on the fuel tax credit.

“The Australian Government’s 38 cent per litre fuel tax credit for off-road fuel use isn’t the only way the mining and farming sectors can manage their fuel costs,” CEO Mike Carmody says.

“People should be looking at using Australian gas instead of diesel; it’s cheaper and less polluting.”

He also points to the fuel security argument.

“Australia has an abundant supply of natural gas, estimated to be equal to 184 years of supply,” he says.

“Using natural gas as a fuel for transport and off-road use ticks all the boxes; it will help operators save money and reduce their carbon foot print, while helping safe guard Australia against the consequences of a disruption to the international oil supply chain.”

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