For staff who don’t have the option of working from home, driving to work is becoming expensive. Some are rethinking the cost of their commute. Without effective alternatives, quitting a job to find work closer to home has appeal. Fuel-saving strategies may help, but will the best solutions take too long?
Petrol prices soared to more than $2.20 a litre in March this year and are predicted to reach as high as $2.60. Petrol retailers can’t easily trim costs because about 85% of the average petrol price is determined by taxes and the international price of refined petrol.
The Federal Government’s cut on the fuel excise in April provided temporary relief, but prices continued to climb in May. CommSec economist Ryan Felsman warns that a fuel tax cut is a ‘bandaid solution’:
“While a temporary reduction in fuel taxes would provide some relief to households, it would also reduce government revenue that would need to be replaced.”
CEO of the Queensland Council of Social Service, Aimee McVeigh, said low-income earners would be acutely affected by fuel prices. She clarified struggles as being when people’s best efforts to make money stretch didn’t meet the basic costs of living, like keeping a roof over their head, three meals on the table, taking their kids to the doctor and having a little emergency money in the bank.
With no reprieve ahead, some are making significant lifestyle changes to be able to fuel their cars—anything from limiting car trips to cancelling private health insurance.
"I live and work in regional Queensland and have to drive one-and-a-quarter hour each way, to and from work. My workplace is in quite an isolated area and this is the drive time for a lot of the staff. Due to the nature of our roles, it is also impractical to carpool. I am starting to think that I don't earn enough to cover increasing fuel costs and may have to look for alternative employment, even though I love my job." - Rebecca.
While the situation is alarming, it’s not the first time the possibility of petrol price hikes has been considered.
A parliamentary inquiry conducted between 2004 and 2007 explored how Australia would fare when global oil reserves run dry. The report predicted peak supply to arrive between 2020 and 2050, after which we’d see supply shortages. Since our main use of oil is for transport, fuel costs would spike. Unless we adapted quickly, the report stated, economic growth would slow and consumers in regional and rural communities, who rely on car transport, would lack alternatives.
That scenario is now playing out in real time as a result of Russia’s war on Ukraine. The ban on imports from one of the world’s biggest oil producers is causing limited supply, making the inquiry’s recommendations pertinent to today.
The parliamentary inquiry recommended a few strategies:
1. Become more self-sufficient
Oil discovery within Australia remains possible, but we’ll need more than our own oil reserves. Use of alternative fuels like natural gas or biofuels (like E10 at the petrol pump) is possible but still presents many challenges to becoming mainstream fuel. Consumers are unsure about it and it’s risky for investors, so it would take a long time to establish.
2. More fuel-efficient vehicles
The report called on car industries to improve fuel consumption. Tax schemes could encourage the use of small cars or hybrid vehicles that are more fuel-efficient.
Of course, electric cars had not yet boomed at the time of the report, and are now a large part of the modern-day conversation.
Dubbo Mayor Matthew Dickerson, who boasts being the first mayor to have a mayoral electric car, supports this shift.
“When people start to see how high petrol prices are, when they look at the cost of ownership of an electric vehicle, they’ll start to realise, yes, they’re more expensive to buy but the running and maintenance costs are so much lower than an ICE (Internal Combustion Engine) vehicle … Maybe expensive petrol prices will change people’s opinions and maybe we will start to catch up with the rest of the world.”
3. Alternate forms of transport
Walking, cycling and public transport all need better infrastructure to become viable alternatives to car use. Rail fuel was reported to be a third of the cost of truck fuel, supporting investment in more railway infrastructure.
Recent research by Dodson and Li at RMIT University recommended better public transport infrastructure, but counteracted a popular suggestion that public transport should be made free. They concluded that this would benefit the wealthy more, since public transport networks are concentrated around inner cities and suburbs. Lower-income workers typically live in more regional and rural communities where public transport systems are not well developed.
Recommendations from their research include:
Planning of new suburbs must include planning for public transport
More equitable transport services, for example, cancelling road projects that entrench car dependence
Income assistance for those who need it most
Transition to electric vehicles in a way that doesn’t just benefit the wealthy
In the long term, Dodson and Li suggest a shift in travel behaviour to reduce our dependence on fossil fuels for transport.
Electric bikes and scooters deserve a mention as a growing trend in alternative transport. While they’re not well-suited to long trips, they may be the solution for regional residents to reach their nearest train station. E-scooter prices range between $500 and $2000, and e-bikes between $1000 and $3000, with rental schemes now emerging. These are less costly than cars, considering that ‘with one kilowatt hour of energy an e-scooter can travel 100 times the distance a petrol car can, and 17 times the distance of an electric car.’
Big-picture solutions still leave us asking how workers can navigate costs right now.
Unfortunately, workers cannot claim tax deductions for travel from home to work unless bulky tools and equipment are part of the picture. But there are other ways to make immediate savings.
1. Shop around for best fuel prices.
Websites and apps can help find the best prices. With differences of up to 40c per litre between petrol stations, it can be worth driving a little further to fill up.
2. Watch the cycle of petrol prices.
The government resets petrol prices in regular cycles. Drivers can take advantage of filling up on dates when the price is lowest in the cycle, and delaying when the price is highest. Some drivers even install a second fuel tank to maximise on low prices.
3. Revise toll use
According to the AAA, toll charges remain one of the highest costs to motor vehicle owners, particularly in Sydney, Melbourne and Brisbane. Avoiding toll routes could save a tidy sum each year. Local rebate schemes, like in New South Wales, entitle drivers to subsidised car registration fees or cash back based on their toll road usage.
4. Off-peak travel on public transport
Ditching the car for other modes of transport, where this is a feasible option, can eliminate costly aspects of vehicle ownership, like registration, insurance, and road taxes. Where there is flexibility of work hours, using public transport at off-peak times can be up to 20% cheaper.
5. Review car insurance
When it’s time for insurance renewal, compare available options. First-year discounts can sometimes be found by going directly to insurers’ websites. Where possible, consider annual payments rather than monthly, as these usually provide a saving.
6. Be more strategic about car trips
Carpooling with co-workers could halve the cost of the commute. Alternately, household members travelling together instead of in separate cars can save as much. At home, instead of multiple car trips to the grocery store in a week, plan ahead, make fewer trips and buy in bulk.
The possibility of losing workers is real if long commutes become unaffordable. Employers need to be empathetic and provide support where possible.
While the government works on big-picture solutions, the petrol price hike might be a catalyst to shifting our transport behaviour to less dependence on fossil fuels. Whether that’s by making better use of public transport, micromobility, car-pooling or adjusting the family budget, it’s worth further conversation.
As travel to work becomes more expensive, you may need to recruit more locally to lower your risk of losing staff. For best outcomes, you need a recruiter with local knowledge.
MTC Recruitment’s point of difference is that we’re embedded in the communities we serve. We’re on-the-ground experts, first getting to know people before we put them forward to you. We have offices in Parramatta and Hurstville, which means we’re strategically placed to provide staffing solutions across Greater Sydney.