The rise of fuel efficient cars will force governments to look for alternatives to petrol taxes, a roads conference heard on Monday, with advocates arguing instead for motorists to be charged according to how far they drive.

Scott Charlton, the chief executive of toll-road company Transurban, said the current method of raising funds for transport was both unsustainable and unfair.

“I drive an electric car, so I don’t contribute to the federal funding pool for infrastructure through fuel excise, despite driving on the road almost every day,” Mr Charlton told the Roads Australia conference in Sydney.

“And it is those drivers who can only afford older vehicles who pay the most in fuel excise per kilometre and those who can buy the newer more fuel efficient cars obviously pay less,” said Mr Charlton, whose company operates multiple toll-roads in Sydney and Melbourne.


The basic alternative promoted by Mr Charlton also has the support of peak motoring bodies. In effect, motorists would pay less petrol tax – the current excise is 38.6 cents per litre – but would instead pay according to how far they drove, whether or not that was on a toll-road.

The world’s first version of the road user charging will soon be trialled in the US state of Oregon. From July, 5000 volunteers will pay US1.5 cents for every mile they drive, with fuel taxes deducted from their bill.

Private companies have won contracts to supply the measuring devices and process the payments for the state.

Jack Opiola, a consultant who helped design the Oregon scheme, said trials had shown motorists were likely to change the way they drove when faced with a user-pays scheme – taking less trips overall, and showing less desire to avoid toll-roads.

California Department of Transportation chief financial officer Norma Ortega, told the Roads Australia conference that her state would trial a similar scheme from 2017 to help it resolve a funding crisis.

California faced a huge backlog in road maintenance, Ms Ortega said, which on current trends would only going to get worse as the government faced reduced fuel tax revenue that it used to pay for transport infrastructure.

“We are increasingly looking at losing revenue due to fuel economy,” Ms Ortega said.

“Currently our vehicles average about 23 miles per gallon, and we are looking at 2025 the number is going to grow to about 55 miles per gallon,” she said. “So that translates to a significant loss in revenue for California.”

Transurban will from September run a trial road pricing scheme for 1200 Melbourne motorists to try and promote the idea in Australia. Politically, however, road user-charging remains a tough sell. A NSW parliamentary inquiry into “road access pricing” has still not handed down its final report, almost four years after starting.

The federal government raises about $10 billion a year from fuel taxes.

Extracted in full from the Sydney Morning Herald.