High petrol prices here to stay – more public transport needed

The finding that there is “no obvious evidence of price fixing” by petrol retailers underlines the need for greater investment in public transport to provide an escape from car dependence, the Public Transport Users Association (PTUA) said today.

“The report on petrol pricing released today by the Australian Competition and Consumer Commission (ACCC) shows that high petrol prices are fundamentally a result of tight supply and demand conditions – not a massive rip-off by petrol companies,” said PTUA President Daniel Bowen. “We have to face the unpleasant reality that high petrol prices are here to stay and alternatives to car dependence are sorely needed.”

International oil prices are currently hovering around US$90 per barrel after recently going close to $US100 per barrel. Many analysts are now saying that it is only a matter of time before oil moves beyond the $100 barrier. The recent high level of the Australian dollar has cushioned the blow for Australian motorists, however the Australian dollar is showing signs of weakness in light of the global credit crisis, and this could flow into even higher petrol prices.

“Many families are feeling the bite of rising petrol prices, and this will flow through to businesses that depend upon consumer spending”, said Mr Bowen. “It’s now clear that there is no silver bullet to lower petrol prices, so transport alternatives are more important than ever.”

Mr Bowen pointed to recent research that households close to good public transport are better able to reduce car use and save on their petrol bills[1]. “High quality public transport offers a realistic alternative to pouring dollars into a petrol tank,” said Mr Bowen. “Many families do not have this option because state and federal transport policy has focussed on building more and more roads while neglecting rail extensions. This is now coming back to haunt us in the form of high petrol bills and costly fuel imports.”

Mr Bowen called on state and federal governments to commit to expanding public transport in their next budgets. “Australian families can’t afford continued car dependence, the climate can’t afford continuing growth in road transport emissions, and the economy can’t afford rapid growth in oil imports. It’s time to build world-class urban and regional public transport systems to wean ourselves off financially and environmentally ruinous oil consumption,” he concluded.



[1] The Griffith University VAMPIRE study into vulnerability to mortgage stress and fuel costs noted that “it is notable that the public transport system appears to be contributing to higher mortgage and oil resilience in those immediate areas where it is of higher quality. In the inner eastern suburbs, it seems that the high density of rail, tram and bus routes in this area is placing these areas at relatively lower mortgage and oil risk when compared to outer and fringe areas. As with Sydney and Brisbane, public transport systems appear to be playing a critical role in ameliorating mortgage and oil vulnerability in Melbourne.”

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