WA fuel crisis: Drivers grateful for excise relief, but economists warn ‘job half-done’ won’t last long

Economists have warned the saving from fuel excise will be wiped out within one to three weeks, if there’s no end in sight to the stand-off in the Strait of Hormuz. The Chamber of Commerce and Industry WA said global oil prices are on track to match the 26 cents-per-litre saving in 11-21 days. Bankwest Curtin Economics Centre director Alan Duncan’s prediction was even more dire. “The price (of diesel) over the past week across most brand outlets has increased by somewhere between 25 and 30 cents. So basically, there’s your answer,” he said. The halving of the Commonwealth’s fuel excise will come into effect on Wednesday, but could take up to a week to flow through to retail prices when supply orders are next filled. The States have also also agreed to forgo extra GST revenue that would flow from higher fuel prices, but it’s unclear how that will be calculated. “We’re waiting for some modelling to come back from the Commonwealth in terms of what that looks like, and what next measures we can take in relation to that,” Premier Roger Cook said. Motorists filling up across Perth on Monday were relieved something is being done to claw back price increases, but weren’t convinced the savings will be passed on in full. The Australian Competition and Consumer Commission has vowed to watch the market “very closely”. For Rob Heath, filling up his 130L diesel work tank at Ampol in Glendalough was a $325 pain in the hip pocket. “My company, Park Aviation has a fleet of cars which we use to do deliveries.... normally we charge $9.5 for metro delivery but if I’m honest we are going to have to reassess that now,” he said. “26c off will be good. Any help is good help.” Prices are dipping slightly on Tuesday, according to FuelWatch, with the average metropolitan price of unleaded set to fall from $2.558 per litre to $2.517. But diesel is still increasing, up from an average of $3.167 to $3.187. There were 17 outlets without ULP on Monday afternoon, while 50 reported that diesel or brand diesel was unavailable - including stations in cyclone-impacted parts of the State’s north. Prof. Duncan has urged the Cook Government not to wait for stage three of the national fuel plan to tackle the demand side of the crisis, as well as firming up supplies. He’s warned the impact is likely to last longer than the three-month time frame set for fuel excise relief, and that vulnerable households are being hardest hit. “This is a supply driven crisis, and so any measures that look to drive up demand in the face of constrained supply are only going to increase prices further.,” Prof. Duncan said. “I just don’t think you can leave the job half done by focusing on supply and not addressing demand and control of demand. “Existing supplies can stretch, but if you’re also pumping demand at the same time, you know that clearly is a recipe for price inflation.” He called for targeted financial support for vulnerable households and industries, and incentives to travel less or use public transport instead. “Other jurisdictions around the world, they’ve really embraced that, whether it’s rationing or quotas or public information . . . efficient ways of maximizing the use of the supplies that we’re facing and to try to ride the shock,” Prof. Duncan said. But Mr Cook has again ruled out free public transport, that is being rolled out in Victoria and Tasmania. “Western Australia already has historically low public transport fares,” he said. Catherine Leddin suggested the Government should open a fuel refinery, as the numbers on her petrol bowser ticked up. “My partner and I both have diesel cars.... they (the government) already has stores of fuel... they should use it now,” she said. “And you know, the petrol stations will probably end up putting their prices up with it, it would be nice if the government would introduce some sort of measure against that. “We used to spend maybe $50 a week and now its genuinely doubled.” Steve Watson was worried taxpayers will have to pay for the $2.6 billion worth of excise relief later. “You do have to think about how it will impact the future of us all, but I think its probably worth it in the meantime” he said. Early childhood educator Oliva Hunt was optimistic, for now. “Look its definitely needed, its costing me a fortune to get around, “It’s just if it stays that way (26c less)... which it won’t, so in a few months its back to expensive again” she said.