If the oil companies raise the cost of fuel by 1 cent per litre at the pump, what would their profit increase be for that day?
In Australia the combined fuel companies sell about 17 billion litres of petrol per year. On average, this would be about 46.6 Million Litres per day. (That’s an average, on “cheap days” they would sell more, on “expensive days” less.) Assuming they sell 46.6 million litres and they receive one more cent per litre they would receive an extra $466,000. However that is not clear profit. The Government, through the GST, collects 10% of that; about $42,000. ($42,364 to be exact, the $466,000 includes 10% GST). Additionally the company has to pay tax. At 30% that would be another almost $127,000 to the government. (30% of $466,000-$42,364 = $127,091). Therefore, in round figures; an increase of 1 cent will give the oil companies an extra $297,000 but the government collects an extra $169,000. As you can see from this, there is no incentive for the government to reduce the cost of fuel. In fact the government has a vested interest in keeping fuel prices high. The government can order inquiri
