The Guardian August 30, 2000


Editorial:
The oil game of musical chairs

The Federal and State Governments, the oil companies and the Australian 
Competition and Consumer Commission (ACCC) must all share responsibility 
for the surge in petrol prices since the imposition of the GST. In a short 
space of time the retail price of petrol has risen 30 to 40 per cent to 
shoot past the one dollar mark at many petrol stations, particularly in 
rural and regional areas.

The Federal Government points the finger at the OPEC oil producing 
countries and the rise in crude oil to around US$30 a barrel. US$30 a 
barrel is not some new phenomenon, petrol prices have historically 
fluctuated, depending on supply and demand and other circumstances such as 
wars. Over the last 25 years the price has ranged from a low of US$10 to a 
high of US$50 (in 1996 prices) a barrel. But we never paid anything like $1 
a litre  the price of petrol remained at about half what it is today.

The GST package (with the abolition of state taxes) has added around one 
cent to the price of a litre of petrol. The rise in excise was even less. 
That doesn't explain rises in the region of 30 cents a litre.

So why did the price of petrol skyrocket?

In the first place the responsibility lies with the already fabulously 
wealthy oil companies who have long conspired to force up the price of 
petrol to further increase their profits. They have taken advantage of the 
introduction of the GST and a general community expectation that prices 
would rise, and jacked up the price of petrol. By increasing prices they 
will be making billions more in profits.

Another factor is the slide in the exchange rate of the Australian dollar 
relative to other currencies. This means imports cost more, including oil.

Then there is the failure of the Australian Consumer and Competition 
Commission (ACCC) to prevent the whopping rise in petrol prices  so far 
it has been unable to detect any oil company profiteering.

The steep increase in the price of petrol is going to feed through into the 
price of many products as the cost of production and transport rises. At 
the same time the policies of State and Federal Governments will continue 
to give "freedom" to the oil companies to charge whatever they like.

So what is the government going to do? Nothing. Prime Minister John Howard 
says, "It's a difficult issue... I want the price [of petrol] to go down. 
It's gone up because of factors over which I have no control." And Howard 
doesn't want control. He wants to go on leaving it to the "markets".

It is in the hands of the people not only to protest now, but to decide 
that a different sort of government is required  one that will take 
control, one that will give priority to the needs and interests of the 
working people and the environment.

1. Price control legislation should be instituted and enforced. This is in 
the hands of the State Governments.

2. The decision to "float" the dollar, which put the Australian dollar at 
the mercy of the currency markets, should be scrapped and currency controls 
re-introduced.

3. Australia's oil and natural gas resources should be nationalised as 
should the oil refineries.

4. Trade policies should be introduced which incorporate the principle of 
"mutual benefit" in our import and export relations with other countries.

5. Measures should be taken to reduce our reliance on fossil fuels and 
reduce greenhouse gas emissions by such means as expanding and improving 
public transport, using rail freight where possible, and developing 
alternative fuel options.

6. The economy calls for the introduction of nation-wide planning so that 
all aspects of production, distribution and exchange can be regulated in 
the interests of the people.

This raises the question of the working people winning political power and 
establishing a workers' government with a determination to implement these 
far-reaching policy changes.

Short of such bold steps we will continue to be at the mercy of the big oil 
companies and those governments which serve them.
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