Rising fuel prices burn

SMALL businesses are being belted by skyrocketing fuel prices and their woes are likely to worsen.

With fuel price rises comes the risk of inflationary blowouts and further interest rate rises.

The demand for petrol in the booming US economy is helping to force the international fuel price up.

For every US$1 rise in the cost of a barrel of oil, Australian petrol prices rise 1c per litre.

As the northern winter takes hold, petrol price pressures are likely to slacken.

However, the winter will increase demand for heating oil so a rise in the price of diesel fuel is likely.

This rise is going to further force up the cost of goods on shop shelves, particularly in regional areas.

Australia is about 70 per cent self-sufficient in fuel but its oil price is tied to the international price.

However, Australian oil companies also gain the benefits from being linked to the world price.

Between them the State and Federal governments take about 50 per cent of the petrol price as revenue.

The Federal Government’s fuel levies an excise of 38.4c per litre. The states get 10 per cent of the fuel price in GST.

Chamber of Commerce and Industry economist Nicky Cusworth said the booming oil price would flow through to inflation.

“The July inflation boost was due largely to the fuel price rise,” Ms Cusworth said.

“Since then we’ve seen further fuel price increases and business costs are starting to rise and we haven’t seen the last of the fuel price effects on the Consumer Price Index.

Combined Small Business Associations of WA president Oliver Moon said the fuel price rises were restricting, particularly on businesses that needed mobility.

Mr Moon said the average small business owner would not know what the real issues were.

“They just want to know what the Government is doing to fix it,” he said.

Motor Traders Association executive director Peter Fitzpatrick said if the international fuel price kept going up, the inflation rate would be under pressure.

“The oil companies have a stranglehold on fuel prices,” Mr Fitzpatrick said.

“Industry, Science and Resources Minister Nick Minchin is not even prepared to take on the oil companies when they breach our own laws.”

Mr Fitzpatrick said several of the oil companies were in breach of the Sites Act that limits the amount of sites they can own.

He said people in WA’s north west already thought the tax savings they received from the GST had been evaporated with the fuel price rise.

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