Taxis brace for added costs as new tax to drive up price of LPG

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Taxis brace for added costs as new tax to drive up price of LPG

by: Robyn Ironside From: The Courier-Mail December 01, 2011 8:11AM

AUSTRALIA'S cheapest fuel will start creeping up in price from today thanks to a new Federal Government excise on LPG.

The 2.5 cents a litre excise will double to five cents a litre from next July, then increase by 2.5 cents a litre annually to a maximum of 12.5 cents a litre by July 2015.

The extra impost is expected to hit the taxi industry the hardest with the majority of cabs converted to LPG.

Steve Spalding from Queensland's peak motoring body the RACQ, said motorists who use LPG can expect to pay an extra $2 a litre when filling a 75-litre tank.

"Over a year, it could mean hundreds of dollars for motorists in regional areas and in the outer suburbs who often drive hundreds of kilometres each week," said Mr Spalding.

"This new tax is yet another example of the Federal Government milking motorists."

Canberra expects to receive an extra $518 million over four years by taxing LPG and other gas fuels.

Mr Spalding said the RACQ would not have such an objection if the government allocated all of the revenue it gained from fuel taxes to building roads.

"The government rakes in around $13 billion from motorists in fuel taxes every year, but only half of that goes back into funding roads," he said.

"The implementation of this new tax further emphasises the need for the Government to use this revenue for the benefit of motorists, through funding the building and maintenance of our road network."

The government excise on petrol and diesel fuels is a whopping 38 cents a litre.