The rising price (and associated costs) of Oil / Petrol Discussion Thread.

[JPFS1]

Originally Posted by vztrt

Asking the econmists, if the government was to drop the excise by let's say 5c/l what effect would this have on the economy? Would inflation rise, drop. Would there be any ill effects beside the government getting less money? I was reading in the age that the government was getting a nice profit with the cost of fuel rising?

It's a hard one.

Yes the state and federal governments make great amounts of revenue from taxes on fuel etc, but it's not like they put it in their back pockets either. We are lucky to have so many benefits and pretty decent conditions in Australia, and it's the high tax revenues, fuel revenues etc. that enable the government to have these policies in place. We aren't are huge population, so higher taxes seems to balance out that problem?

We are just in an inevitable situation where we are dealing with a commodity that is outstripped by supply issues, and is priced in a currency that is continually falling, which then has the opposite affect on the commodities price. Throw in the Futures market, wars etc etc, and it's not hard to understand how this is getting out of hand.

Also, LPG will be attracting an excise as of 2011? Something like that anyhow.