With fuel prices breaking the $1.50 barrier and inflation now over 4 percent, it is high time that the issue of a fuel excise cut was seriously debated, says the Victoria Tourism Industry Council.

"The tourism sector recognises that greater fuel efficiency and oil substitutes will be needed over the longer term", says VTIC Chairman, Jeremy Johnson.

"However, in the short-term, real jobs, businesses and lives are being affected by spiralling petrol prices.

"The recent increases in fuel prices would add in the order of tens of dollars to a family holiday in regional Victoria and should not rationally be a deterrent - however, if fuel prices keep rising, this may not hold.

"The perception as well as the reality of higher fuel prices will undoubtedly have an effect on those looking to undertake driving holidays – this has already been showing through in VTIC surveys.  In the last VTIC Survey of Tourism Performance and Outlook, taken in late 2007, oil and petrol prices were identified as a 'significant' or 'critical' constraint by 32 per cent of tourism business respondents, higher than in the previous quarter (26 per cent).

"While many tourism businesses are affected by the continued strength of oil prices, rural and regional businesses potentially face a greater impact if higher petrol prices discourage tourists from travelling outside of metropolitan areas. Similarly, businesses that have significant transportation costs, including tour operators, are likely to be adversely affected.

"A temporary reduction in fuel excise, backed by a rigorous ACCC enforcement regime, would do two things:

1) Provide some immediate relief to motorists and make driving holidays more attractive
2) Help break the back of the current bout of inflation we are experiencing

"US Republican Presidential candidate John McCain has proposed a similar solution in the United States, calling for a summer tax holiday from federal excise on petrol that would save motorists US18.4¢ a gallon (3.8 litres) — at an estimated cost of $US168 million ($A181 million)", says Mr Johnson.

The Victoria Tourism Industry Council (VTIC) is the peak policy council for the Victorian tourism industry, which represents key industry associations, operators and government agencies, providing one united industry voice.