Caltex welcomes the announcement by the Australian Government today that its carbon price will not apply to petrol, diesel and LPG used in light vehicles, which are typically operated by private motorists and small businesses.

Many motorists, particularly those in outer suburban, regional and rural areas, have no viable alternatives to using their vehicles.

The lack of transport options means a carbon price would have little or no impact on the driving behaviour of motorists and, as a result, minimal impact on fuel use and greenhouse gas emissions.

There are more effective ways to reduce emissions from light vehicles. These include investment in public transport, road infrastructure and improved urban design, as well as encouraging the manufacturing of greener vehicles in Australia, incentives for consumers to purchase lower carbon vehicles and setting vehicle carbon dioxide emission standards.

Given the Government's decision to apply a carbon price to heavy vehicles and other business users of petroleum fuels, the mechanism to apply the price through a reduction in fuel tax credit appears to be transparent and administratively simple. It avoids the complex permit system proposed under the Carbon Pollution Reduction Scheme and its costly churn of permits.

Under the proposals announced today, Caltex will only be responsible for its own emissions, mostly from its two oil refineries.

The transitional assistance of 94.5% announced for oil refining, which is a trade-exposed industry, will help to keep Australian refiners on a level playing field with overseas competitors who do not bear any explicit carbon costs. Providing the highest rate of transitional assistance to oil refining will help preserve Australian jobs, investment and technological skills.

However, the Government's proposal provides less than full maintenance of international competitiveness and Caltex will continue to argue for transitional arrangements that meet this objective.

Caltex will be closely examining the legislation and regulation and engaging in the consultation process between business and Government.

Note:
Light vehicles are defined as having a gross vehicle mass of 4.5 tonnes or less, typically including cars, SUVs and light commercial vehicles. These vehicles are not eligible for a fuel tax credit.

Media contact:
Sam Collyer                                        
Media Adviser                                     
02 9250 5094
sam.collyer@caltex.com.au                   

Analyst contact:
Fran Van Reyk
Manager, Investor Relations
02 9250 5378
fvanrey@caltex.com.au