Fed: Costello blames world oil price for rising cost of driving

AAP General News (Australia)
12-15-2000
Fed: Costello blames world oil price for rising cost of driving

MELBOURNE, Dec 15 AAP - Higher world oil prices and not the new tax system was to blame
for the rising costs of driving, Treasurer Peter Costello said today.

Higher new car prices, petrol costs and the expense of running a vehicle have whittled
away any savings motorists might have made in the wake of the GST, according to an RACV
survey released yesterday.

The survey found it was now $8 a week more expensive to run a current model Commodore
than it was in May. A Magna now cost an extra $12.40 a week.

Mr Costello said the tax on cars had fallen and the price of cars fell accordingly
since the introduction of the new tax system in July.

"Since then you've had other factors such as the increase in world oil prices which
has pushed up the price of petrol," he said.

"Petrol prices are too high - they're high because demand is strong and production is low."

But relief would be in sight after the northern hemisphere winter when demand for oil
was expected to drop, Mr Costello said.

A slowing in the US economy was also predicted to influence demand for oil.

"They are the best conditions, along with increased supply from OPEC, for the price
of oil to fall and that will be good for Australian consumers," Mr Costello said.

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KEYWORD: PETROL COSTELLO

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