The Age: Petrol price sky high, pressuring rates

As reported in The Age rising petrol prices have become a familiar sight in recent times as an increasing number of commentators reiterate that that the era of cheap petrol is over:

PETROL rose to a record high $1.45 a litre across Melbourne yesterday following warnings that it will increase further – potentially boosting inflation and putting pressure on interest rates.

While organisations such as the RACV favour the removal of taxation on fuel it should be blatantly apparent that such simplistic measures are not the solution, as oil prices will simply continue to increase due to strong demand from China and India on the world’s limited oil supplies.

Public Transport Users Association spokesman Alex Makin said it was obvious that petrol prices would keep increasing – and repeated the call for better tram, train and bus services.

He said Melbourne’s outer suburbs, which are heavily car reliant, would become “financially unviable” unless car dependence was reduced.

Melbourne’s outer suburbs need an alternative to car dependence and high petrol prices and that alternative will only be realised through the provision of better public transport.

A published report entitled Oil Vulnerability in the Australian City has explored the repercussions of rising petrol prices within Melbourne and has found the following:

Clearly outer-suburban areas, locations that contain low socio-economic status populations, and suburbs which have high levels of car dependence will be the most affected by such increases. Acknowledging this uneven distribution of impacts will be critical to policies that governments may pursue to adjust our urban systems to cope with costlier fuel.

With transport being one of the largest items of expenditure within a household budget (averaging 15.2%) it is clear that rising petrol prices will disproportionately affect those people who do not have an alternative to car dependence.

The responsibility rests with the State Government to improve public transport through providing much needed tram and train extensions and substantially improved bus services.

The report can be downloaded via the Urban Research Program at Griffith University.