What if petrol increased to $10 per litre? Implications on travel behaviour and public transport demand

Abstract

Petrol prices are increasing at a formidable rate. In July 2007 unleaded regular petrol in the typical Australian capital city was about $A1.20/litre and 12 months later the price was over $A1.60/litre. Pundits predict that the price will be $A2/litre by the end of 2008, and long-term forecasts by the CSIRO† suggest a price as high as $A8/litre in 2020. Given these recent hikes in petrol prices, we are seeing almost daily commentary on what this will mean for the future of mobility and accessibility. Commentary ranges from fear mongering using analogues from theology, such as ‘the war on mobility has finally arrived’ and ‘the end of western life styles as we know them’, through to views that we must not allow this to happen and government must act by reducing fuel excise. Others express elation that finally we have pricing signals that might encourage earlier investment in substitutes that include public transport, more fuel efficient cars as well as lower polluting vehicles. This paper uses TRESIS, an integrated transport, land use and environmental strategy impact simulation program, to assess the influence of higher fuel prices on short run and long run passenger travel activity in Melbourne. We evaluate petrol prices in the range $A2 to $A10 over the period 2009-2017, to establish likely impacts on car use, modal share, greenhouse gas emissions, public transport revenue and consumer surplus.