diesel, the Chairman of the Australian Trucking Association, Trevor Martyn, warned today.

Mr Martyn said the retail price of diesel was now more than 180 cents a litre in some capital cities,

compared to about 134 cents per litre in October last year – an increase of almost 35 per cent.

He warned the price of diesel could go above $2 per litre in the next few months.

"Some trucking companies impose fuel levies and adjust them regularly, but many companies have been

trying to absorb the rising cost of fuel," Mr Martyn said.

"Those companies will go out of business unless their customers pay freight rates that reflect their real costs.

"The freight rate increases could be substantial, depending on the trucking company and its cost

structure.

"Some companies haven’t received a rate increase for the last eight months – they would need

an increase of more than 10 per cent on average just to break even.

"Our customers have got to understand they face a stark alternative.

"They can either pay freight rates

that reflect the cost of fuel, or a large number of trucking companies will have to close down. Once that

happens, our customers won’t be able to find operators to move their goods in a timely way."

Mr Martyn said there was nothing the Australian Government could do to reduce diesel prices.

“The Australian price of diesel tracks the Singapore wholesale price very closely. It’s going up because

of China’s booming economy, not because of anything we can do in Australia," he said.

"The Government has already made the important decision to retain the fuel tax credit scheme, which

means that trucking companies pay 19 cents per litre in fuel tax rather than 38 cents per litre. The green

movement lobbied the Government to abolish the scheme; we argued just as hard that it should be

retained."

Mr Martyn said the rising fuel price would be a key issue at the Australian Trucking Convention next week.

"We’ll be calling on trucking companies to track their costs very closely, to make sure they don’t fall

behind as the cost of diesel continues to rise."