There has been much debate recently about tax on diesel. This tax was introduced to fund the infrastructure for natural gas, but this infrastructure has never happened. So the question arises: why do we still pay the tax.
When diesel first became popular, it was because it was cheaper. It was cheaper, because it is less refined, so costs less to produce than other petrol does. This is also the reason that diesel vehicles are more expensive than petrol cars.
Many people opted to pay more for diesel vehicles, on the premise that the long term savings on fuel would be more economical. However, as the number of diesel vehicles has increased, so too has the greed of the oil companies and governments.
Knowing that people are locked in to using diesel, because of the large outlays for their vehicles, prices have soared, to a stage where diesel now costs more per litre than petrol, even though it is much cheaper to produce.
In Europe, diesel is about 25% cheaper than in Australia. The oil companies state that it is higher in Australia, because the price is indexed to the Singapore price (the same old line they use for higher petrol prices). In Asia, diesel vehicles are far more popular per capita than in other countries, and oil companies tend to charge higher prices simply because they can get away with it. In effect, they are profiteering.
There is little regulation in many Asian countries. These over inflated prices are then passed back to the Australian consumer, simply because Australia happens to be in the same general geographic region. The Singapore index is not reflective of the world market.
Diesel is also more climate friendly than petrol. So why then doesn’t Penny Wong, Australia’s climate change minister, act on this rip-off by the oil companies? And why doesn’t the government axe the tax on diesel, which has never been used for the reason it was introduced?
22nd April 2008