FuelWatch running out of gas for Rudd Photo:
Steane Klose | May, 28 2008 | 20 Comments

Federal opposition leader has dubbed the government?s controversial FuelWatch plan as ?FoolWatch? as Prime Minister Kevin Rudd hints at a possible double-dissolution election.

The opposition are preparing to block a number of key Budget measures in parliament in a move that could force an election as early as late 2009, one of which is FuelWatch.

Implementation of the FuelWatch scheme would see petrol stations forced to provide their next day price 24 hours in advance. Motorists would then be able to compare prices in their area via a website or by calling a hotline service.

Adding to the new government?s woes is a leaked Cabinet document, written by Minister for Resources Martin Ferguson which argued that FuelWatch may not reduce the price of petrol. The opposition believes it will actually drive up the price of fuel and this argument is supported by online fuel monitor MotorMouth.


In support of FuelWatch the Government is maintaining that research conducted by the ACCC (does anyone listen to them anymore?) at the request of the Howard Government suggests that implementing FuelWatch will cut the average price of petrol by as much as 1.9 cents per litre.

Unfortunately, FuelWatch has proved to be anything but the saviour of the average motorist in Perth. Introduced by the Liberal government in WA, petrol prices under FuelWatch have remained stubbornly high. In fact, a three month survey spanning early February to late April this year showed that the average weekly price of unleaded petrol in Perth was generally higher than in Sydney and Melbourne for all but three weeks.

Nelson has challenged the Prime Minister to ?get out of the way and give the job to someone who can? do more for Australian families. Labor recently rejected Nelson?s plan to cut fuel excise by 5 cents per litre, while Labor are said to be considering removing the GST that is currently collected on the excise component of fuel (currently a tax on a tax), a move that would be likely to save motorists 3.8 cents per litre but don?t hold your breath.

As our politicians squabble over a few cents per litre what is expected to happen to fuel prices in the future? Well, the Australian Bureau of Agriculture and Resource Economics are being optimistic and suggest that oil prices in real terms will halve by 2013. With prices currently at $US133 per barrel they are expecting the price to ease to $US67. The big question is will the oil companies who have never known more profitable times follow suit??

[Source: HeraldSun]

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