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Winter adds to diesel blues

WHILE petrol prices appear to have stabilised, diesel continues to rise.

OPEC’s increased production appears to have paid off at the fuel bowsers, but the approaching northern hemisphere winter is increasing the price of diesel.

Diesel-grade fuel is also used as heating oil in the northern hemisphere and stockpiles are tight.

RAC senior engineer policy Mike Upton said the northern winter, along with the regrowth of the Asian economy, would increase demand for diesel rather than petrol.

And OPEC members increasing production \ will not help in the short-term.

“There is a bottleneck in getting oil from the wellhead to the refineries,” Mr Upton said.

“The refineries are also working flat out to try and meet the demand.”

Mr Upton said the US release of 30 million barrels of oil from its strategic reserves was “just a drop in the ocean”.

“It depends on how it affects oil buyers perception,” he said.

One of the main complaints about rising fuel prices has been the increased government tax take at the pump.

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

The Federal Government’s excise is expected to be raised again in February.

However, the Government argued that cutting fuel levies would be at the expense of Government programs.

Another argument is the need to maintain world oil price parity given Australia’s 70 per cent fuel self-sufficiency.

Removing oil price parity would prevent Australia’s oil companies from cashing in on the higher global price.

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