Soaring petrol prices could top $1 a litre

By PHILLIP HUDSON POLITICAL REPORTER Saturday 11 March 2000 Almost there: Victorians are almost certain to pay $1 a litre for petrol.

The price of unleaded petrol in Victoria yesterday reached a record 96 cents a litre amid predictions it could soon rise above $1.

The record high was in Echuca but most state motorists were paying more than 90 cents a litre.

While a few Melbourne petrol stations were charging 93 cents at the pump, the most were selling petrol for less than 90 cents a litre, according to the RACV.

However, one company increased city prices to 93.5 cents a litre late yesterday.

Production restrictions by the OPEC oil nations combined with a weaker dollar have forced up the cost of fuel for the long weekend. Motorists could face another two weeks of high prices before a crucial meeting of the OPEC oil-producing nations on 27 March.

The RACV manager of government affairs, Mr David Cumming, said rising world oil prices had caused the wholesale price of petrol to increase five times in the past week, pushing up pump prices by three to four cents a litre.

But he said 93 cents was "way too high" in metropolitan areas and he urged motorists to shop around to find a lower price.

The executive director of the Victorian Automobile Chamber of Commerce, Mr David Purchase, predicted motorists could face more increases.

"Within the next month or so it's not beyond the realm of possibility that we could reach the magic $1 mark," he said.

Mr Purchase said motorists were being held to ransom by the OPEC oil producing countries who limited supplies to "jack the price up".

He called for a review of the scheme where even Australian-produced oil was locked into the Singapore product price, which is based on world prices.

Mr Purchase also said diplomatic pressure should be placed on OPEC countries to ease up the supply of oil, and thereby reduce the pump price. He said many service stations bore the brunt of consumer anger at the spiralling cost of petrol.

He predicted more consumers would consider converting to gas, which was cheaper than petrol, although it was also increasing in price.

Mr Cumming said he strongly defended Australia's oil price link to Singapore because there was "not a better system".

"Unless you want to regulate the market, which could see Esso-BHP exporting their oil instead of selling in Australia and some companies pulling out of Australia, a link to Singapore prices is still appropriate," he said.

Mr Cumming said although the Government could not control OPEC or the dollar, it could reduce the 44 cents a litre petrol tax. with AAP

http://www.theage.com.au/news/20000311/A1811-2000Mar10.html

-- Martin Thompson (mthom1927@aol.com), March 10, 2000