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Pain at the pump -

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Pain at the pump

Broadcast: 19/05/2011

Reporter: Brendan Trembath

Many Australians are driving less or opting to give up their vehicles altogether because of the
surge in fuel prices.


LEIGH SALES, PRESENTER: The fallout from the unrest in the Middle East, specifically the
oil-producing nations, is hitting the global economy.

In Australia it's contributing to the highest petrol prices for almost three years.

The price spike is changing consumer behaviour, with people driving less and even giving up their
vehicles for car-sharing networks.

One major motoring organisation claims petrol prices are serving as the country's de facto carbon
tax, as Brendan Trembath reports.

BRENDAN TREMBATH, REPORTER: Perth couple Mathew Murray and Kerrin Simmonds used to run two cars,
but increasing pain at the petrol pump has forced them to change their ways.

MATTHEW MURRAY: I take my partner into work with me and drop her off at the train station and then
she goes from there.

BRENDAN TREMBATH: He's been making this trip for years. With the worsening traffic and the current
price of petrol it's frustrating and expensive.

MATTHEW MURRAY: Back 16, 17 years ago it used to cost me $40 to fill up for the week. Now it's
costing me in this ute $120.

BRENDAN TREMBATH: At the end of April the national average price of petrol was about $1.45 a litre,
which seems incredibly steep if you go back a few decades.

Inflation has worked its black magic. In the '70s, the average price was 20 to 30 cents a litre. In
the '80s, 20 to 40 cents. In the '90s, 40 to 80 cents.

Then the price of petrol exploded, entering the new realm of 80 cents to $1.60.

The peak came during the Global Financial Crisis.

GEOFF TROTTER, FUELTRAC: Here we sit in 2011 at $1.45 at the moment, so in relative terms we're
still well below the peak price.

BRENDAN TREMBATH: Where prices go next is anyone's guess.

MATTHEW MURRAY: Petrol prices I think are gonna rise. I wouldn't be surprised if it eventually gets
to $2. I think it's gonna be a pretty sad day, but unfortunately I think that's what's gonna

WENDY MACHIN, NRMA: Well, my feeling is that petrol prices rising's a bit like death and taxes:
it's inevitable.

BRENDAN TREMBATH: Wendy Machin heads Australia's largest motoring organisation.

WENDY MACHIN: We know petrol prices will go up, that's why the NRMA and a number of the other auto
clubs around Australia have for some time now been starting to say we've gotta get into
alternatives, we've gotta start looking at other options apart from foreign imported oil.

BRENDAN TREMBATH: Large oil fields are being exhausted and new sources of oil are harder to find.

The oil industry is trying to be optimistic though. Some observers say there is much more oil still
to be discovered. But that's not everyone's view.

WENDY MACHIN: Well it's just wishful thinking. To think we're gonna find more oil. There's an
ongoing debate about that - bit like climate change, you know: have we reach peak oil? A lot of
people think we might have hit peak oil a couple of years ago. For Australia, it's a real risk. We
are an importer of oil, we are importing increasing amounts of oil, that costs us dearly in terms
of our input costs and it puts us at the mercy of foreign suppliers.

BRENDAN TREMBATH: Dwindling oil supplies and the pressure on petrol prices are forcing motorists to
reconsider how often they drive.

SHANE OLIVER, AMP CAPITAL: If you look at the last five years, the proportion of a typical family
budget that's devoted to fuel has stayed around the four to five per cent level. So that's despite
the rise in the fuel price, people must be using less fuel, and they're doing that by either
driving less, using public transport more and of course switching from the typical large six
cylinder Australian car down to smaller four cylinder, typically sports utility vehicles.

BRENDAN TREMBATH: That's probably good for the environment. Motor vehicles account for about eight
per cent of Australia's carbon pollution. Motorists already pay a type of carbon tax at the petrol
pump. 38 cents a litre goes to the Federal Government.

SHANE OLIVER: So that's effectively doing the work that a carbon tax would do, probably on a much
grander scale, because the price impact on fuel has been much greater.

BRENDAN TREMBATH: The motoring organisations want a tax break and more funding to encourage the use
of other fuels and more fuel-efficient vehicles. For now though, they say most motorists are stuck
with thirsty petrol engines.

KIRSTIN HUNTER: We noticed that the cost of petrol kept getting more expensive and when it got to
$50 to fill up our Barina, we thought that was getting a little bit too far.

BRENDAN TREMBATH: In many cases people are selling their cars and looking for another option.

Kirstin Hunter joined a car-sharing network, which has cars parked in spots around the city. She
books one for big shopping trips or weekends away.

KIRSTIN HUNTER: It's made us really think each time we use the car whether we need to use the car
or whether it's something that we can use public transport for.

GEOFF TROTTER: The actual vehicle sales in Australia the last year have declined about four per
cent, so there has been a decline in the vehicles overall, there has been a significant shift in
the types of vehicles that are being purchased and there has been a significant growth in public

BRENDAN TREMBATH: The driving habit can be hard to break, but many motorists are giving it a try.

SHANE OLIVER: In Australia's case, my feeling would be that we'd probably hit a tipping point at
around $1.60 a litre level, and that of course was the price that we spiked up to in mid-2008. I
think if we saw that level again, it would really put a lotta pressure on household budgets.

LEIGH SALES: Brendan Trembath reporting.