Tasmania braces for petrol pain

Hobart's Phil Wilson fills up his car in Launceston. It could be much more expensive after the federal budget. Picture: SCOTT GELSTON

Hobart's Phil Wilson fills up his car in Launceston. It could be much more expensive after the federal budget. Picture: SCOTT GELSTON

TASMANIANS will be the hardest hit if petrol price rises are included in Tuesday's federal budget, according to the state's peak motoring body.

Royal Automobile Club of Tasmania chief executive Harvey Lennon said any increases to fuel excise could deal a knockout blow to the state's drivers.

The amount of fuel excise paid by motorists across the country has been locked at 38.1c a litre since the GST was introduced in 2001.

Reports published in  The Australian  yesterday revealed the federal government was considering lifting the excise by 3c a litre.

The move is expected to pump more than $1 billion in revenue into the federal budget.

A spokeswoman for Treasurer Joe Hockey said the government would provide no comment on the speculated changes.

Mr Lennon said reintroducing indexation on fuel excise would cripple Tasmanians, who relied more heavily on their vehicles than those living interstate.

``With so many around the state living in rural and regional communities there would be no escaping this price increase,'' Mr Lennon said.

``And we simply don't have a public transport system which supports the majority of the community, making the situation even worse.''

Mr Lennon said Tasmanians already paid up to 8c a litre more for fuel than others around the country.

``Adding further disadvantage to the state's motorists would be extremely concerning,'' Mr Lennon said.

``Tasmania needs all the help it can get with petrol prices, and any further hindrances will undoubtedly be a major setback.''

Phil Wilson, who filled up his tank in Launceston yesterday, said he would do a lot less driving if the changes took effect.

``It would definitely affect me,'' Mr Wilson said.

``There should not be an increase in petrol prices; if anything, they should be decreasing the price.''

Leading economist Saul Eslake said increasing fuel excises would be framed as a broken promise from the Abbott government, and was likely to be hugely unpopular.

But Mr Eslake said lifting the excise would be a sensible change to make.

``The Howard government's decision to abolish the annual indexation of petrol excise was one of the silliest tax policy decisions of the past 20 years,'' Mr Eslake said.

``While nobody likes this sort of thing, it would be a more sensible measure than increasingly  income tax.''

But Mr Lennon said the RACT would push the state government to take swift action on possible petrol price changes.

``It's time our government put the case to their federal counterparts that Tasmanians are already getting a raw deal on petrol prices,'' he said.

``They should be doing that as soon as possible, straight away, ahead of Tuesday's budget night.''

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