Watch out, Australia.
Your next fuel tax hike will be a bit on the pricey side, at $2.50 per litre, and there’s a risk of another petrol price spike next year.
The Australian Bureau of Statistics says the cost of producing petrol in Australia is about 10 per cent higher than in China, where it is about 18 per cent.
But the increase is not as dramatic as in Europe where it has risen by more than 70 per cent over the past decade.
Aussies could also find themselves paying more for imported fuel next year, as the global price of oil has fallen and global demand for fuel has fallen.
Last year, imports of Australian gasoline reached their highest level since the Great Depression.
In the same year, the cost for Australian gasoline in the EU rose to about $2 per litres.
“The US is in a similar situation as Australia, but we are doing a better job at keeping our prices in check,” Mr Clements said.
In China, the government has also boosted the price of imported petrol, which is around $2 a litre in the case of petrol imported from Japan.
But with gasoline in China so expensive, most Australians do not buy their fuel at the pump, and the price for imported petrol is not reflected in the price at the petrol station.
Mr Clements says that while the price increase could hurt petrol sales, the industry needs to find a way to reduce the fuel tax by a third or more.
“The fuel tax is a subsidy for the government, it’s not a subsidy to motorists,” he said.
“But we have to find ways to reduce it.”