How much of your fuel bill goes to government?

With petrol prices climbing across Moreton Bay, should the government take another look at fuel excise? 

For many people across Moreton Bay, filling up the car has become one of those weekly expenses that you simply can't avoid. 

Whether you're driving to work in Caboolture, taking the kids to school, travelling across to Brisbane or commuting from Bribie Island, the cost of fuel quickly adds up. 

And when petrol prices rise, it's not just motorists who feel it. 

Higher transport costs can eventually flow through to deliveries, trades, food, services and other household expenses. 

Recent fuel-price monitoring by the ACCC shows that petrol prices have been rising across Australia, with international refined-fuel prices affected by the continuing conflict in the Middle East. 

In Moreton Bay, prices can vary considerably from one service station to another. Queensland's fuel-price reporting system allows motorists to compare prices between retailers before filling up. 

But there's another part of the price that motorists can't shop around to avoid – Tax! 

The federal government collects fuel excise on every litre of petrol and diesel sold in Australia. 

Earlier this year, the government temporarily reduced the fuel excise by 32 cents a litre, from 52.6 cents to 20.6 cents, before partially restoring it. A further temporary reduction of 16 cents a litre applied during July until August 2^nd – raising a straightforward question: 

When petrol prices are particularly high, should the government reduce the fuel excise again? There is an argument for doing so. 

A temporary reduction could provide immediate relief to motorists, particularly people who have little choice but to drive long distances for work, medical appointments, shopping or family commitments. 

But there is another side to the argument. 

Fuel excise raises substantial revenue for the federal government.  Reducing it means the government has less money available for other spending. There is also an economic argument that cutting fuel taxes during a period of high prices can encourage fuel consumption when supply is tight. 

Then there is the question of fairness. 

Should someone who drives 10 kilometres a week receive the same benefit from a fuel-excise cut as someone who drives 500 kilometres? Should taxpayers generally subsidise fuel consumption when governments are also trying to encourage more efficient vehicles and reduce emissions? 

Unfortunately there is no simple answer, however perhaps the debate shouldn't simply be about whether petrol is expensive. 

It should be about how much of the price is determined by international oil markets, how much comes from refining and distribution, how much is the retailer's margin — and how much goes to government through tax. 

For motorists staring at a $2-plus price at the bowser, those distinctions may not matter when the bill arrives. But they matter when we ask what governments can actually do about it. 

Perhaps the question for Canberra is not simply: Can we afford to cut fuel excise? Perhaps motorists should be asking: When fuel prices are putting pressure on household budgets, should the government continue collecting the same amount of tax on every litre — or should some of that burden be temporarily reduced? 

And if the answer is yes, then comes the next question: How would the government replace the lost revenue?  Ultimately, somebody pays - the motorist pays at the bowser - the taxpayer may pay through reduced government revenue - or the community may pay through reduced spending somewhere else. 

With fuel prices once again becoming a major household concern, perhaps it's time for a proper conversation about the numbers — not just the price on the sign. 

How much tax is too much when families are already feeling the squeeze?