Diesel-engined cars are becoming very popular. Of course operators of diesel-powered commercial vehicles in Australia have long enjoyed the huge savings on maintenance and economy that diesel offers. However, the one thing that sticks in the craw of motorists who drive diesel vehicles is the iniquitous price of this fuel over that of petrol.
These days, diesel fuel costs a lot more than petrol and it is interesting to note that when the price of petrol fell by around 50% from July to December 2008, the price of diesel fuel hardly moved. Petrol fell from $1.50 to under $1.00 per litre in six months, due to the world economic downturn, yet diesel fuel fell around 10 cents in that time.
Why is this so? For starters, diesel fuel is far cheaper to manufacture. It does not require the amount of refining that petrol needs to get the finished product. It is not a scarce commodity, as the Federal Government would have us believe, using this as an excuse for keeping the price high. In fact in most other parts of the world, diesel fuel is far cheaper than petrol, as in Europe and Asia. In the USA, diesel fuel is more expensive than petrol, because of the same lame excuses that the Federal Government makes here in Australia. It is interesting to note that in the USA, fuel taxes are around 16%, unlike the massive 30% or more in Australia.
There is no doubt that diesel fuel should be a lot cheaper than petrol, especially these days where more and more diesel-powered cars are being sold, which should make this fuel more competitive at the pump. Motorists should take action to force the Federal Government to firstly remove the illegal Fuel Excise and then stop pricing diesel fuel using the Singapore benchmark and use a more realistic way to price diesel fuel.