Changes to fuel scheme puts subsidy in drivers wallets

By: Graham Gardiner

Queensland Premier Anna Bligh has announced a plan to force petrol stations to cut the full 8.354c per litre subsidy

Queensland Premier Anna Bligh has announced a plan to force petrol stations to cut the full 8.354c per litre subsidy from the price charged at the pump.

The upgraded scheme is aimed at stopping oil industry rorts of the $540 million per annum subsidy and putting the money straight in motorist’s pockets.

A point-of-sale ID system will be provided to Queensland licence holders that will entitle them to have the full 8.354c per litre deducted at the checkout.

"We aim to use something as simple as a bar code sticker on Queensland driver’s licences, but we will examine all the options to make sure we get the best system," she says.

"The subsidy was introduced for one reason – to make petrol cheaper for Queenslanders.

"Sadly, it appears that too often the real winners have been the oil companies; we want to put a stop to that."

The Premier says the Government set up the Fuel Commission of Inquiry chaired by Bill Pincus QC to find out if Queenslanders were getting the full benefit of the scheme.

"We are sick and tired of wrestling with the oil industry, which has been found by the Fuel Commission of Inquiry to be withholding up to $100 million of the subsidy from Queensland motorists every year," she says.

"The scheme started off with the subsidy being paid to wholesalers but the fact is many of them were rorting the system.

"To overcome that we tried paying the subsidy directly to retailers but we had problems there too.

"Now we are cutting out the oil industry entirely and putting this money directly in our motorist’s pockets."

Under the proposal a swipe of a driver’s licence will require fuel retailers to deduct the full 8.354c per litre subsidy from the price displayed at the bowser.

"That way there can be no argument that the full 8.354c per litre subsidy is being deducted," Bligh says.

"When he delivered his report, Mr Pincus said we should abolish the scheme. But I am not prepared to do that when Queensland households are under real financial pressure with rising interest rates and the increasing price of petrol and groceries.

"I will not kick them when they are down. That’s why the subsidy is staying in place."

The Commission also proposed a complex scheme of setting a benchmark price for petrol and paying the subsidy only partially when prices were above that price.

"The system the Commission proposed is complex and could easily result in even less of the subsidy being passed on to motorists," she says.

"We assessed the proposal and have concluded it is not practical. It is not the best way to pass on the 8.354c to Queenslanders.

"We will be working now with key stakeholders – especially the MTAQ and the RACQ – to establish a system and undertake detailed costings.

"I am committed to this subsidy providing petrol price relief to Queensland and this new scheme will ensure that happens."

Treasurer Andrew Fraser says that once this series of discussions takes place it will take some time to get the technology into service stations.

"A clear priority for the subsidy scheme is to get full value for money through to Queensland motorists who face rising petrol costs," he says.

"When we started the Budget work we focussed on finding a new way to deliver the benefit.

"The roll out of the technology will take some time. Ideally we would have the scheme rolled out by Easter 2009 and we will need to work intensively with industry to get viable technology rolled out to Queensland’s 1,800 service stations.

"We will need to work with industry to ensure there are no unintentional consequences of this new scheme.

"But our only aim is to make sure motorists are getting the full subsidy in their pockets and we believe this is the best way of doing that."

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