UPDATE 4.45pm: MOTORISTS will be pinged for their fuel use, even though petrol has been spared from a carbon tax impost, the Australian Greens insist.
The federal government today announced petrol would be exempt from its planned carbon pricing mechanism.
It's a major concession from the Greens, who have long advocated that fuel be included.
"We want Australians to drive less, and when they do drive, to drive more efficiently," deputy Greens leader Christine Milne told reporters in Canberra today.
"At the moment we've got a mish-mash of policy ... we have got an excise regime and we have no carbon price as such.
"We need to restructure the fuel excise to reflect the fuel energy content of fuel."
Senator Milne said a basic tax that increased according to energy consumption would provide transparency for motorists as well as a good outcome for the environment.
Senator Milne said the Greens fought hard for petrol not to be exempt from the carbon price, but that independent MPs Tony Windsor and Rob Oakeshott got their way in the end.
Details of the carbon tax are still being negotiated, but Greens leader Bob Brown conceded members of the multi-party climate change committee were on the verge of a deal.
The committee meets again at the end of the week.
"We're going to the finishing line, or we're very close to it," Senator Brown said.
Despite petrol's exemption, he said: "There's an inevitability that all fossil fuels will be under (a tax)."
Ordinary motorists will be saved from the carbon tax under the federal deal that shields households from spikes in fuel prices.
Prime Minister Julia Gillard today announced one of the most significant planks of her controversial tax in a bid to ease concerns about increases to households bills.
"For the many, many Australians who drive long distances, maybe to work, maybe driving their kids on the weekend or going on holidays with the family, this will be a big help," the PM told theSunday Herald Sun.
"This means that families, tradies and small businesses won't pay a cent more at the petrol pump because of the carbon price."
More than 12 million "ordinary" motorists - families, tradies and small business - will be exempt from paying about 6c a litre extra at the pump under a price of $25 a tonne.
It is expected the price of carbon will be about $25 a tonne when the tax starts in July next year.
Ms Gillard acknowledged that independent MP Tony Windsor played a major role in the decision to exempt petrol.
"He has put forward a powerful case for people in country Australia who have got no choice but to jump in their cars to get places."
Ms Gillard said the exemption would not be a temporary measure.
"Petrol will be out now and out for the future."
The final deal between the Multi-Party Climate Change Committee, which includes the Government, the Greens and two independents, is expected to be announced within days.
And in a major shift from former prime minister Kevin Rudd's Carbon Pollution Reduction Scheme, Ms Gillard will pledge fuel will never be subject to the new tax, even when the tax passes to an emissions trading scheme in 2015.
Mr Rudd promised only to offset fuel cost increases "cent for cent" for three years, and urged motorists to think about their next choice of vehicle.
Ms Gillard's pitch to win over middle Australia comes as rising fuel prices are eating into household budgets, especially for those driving long distances to work.
The move will save motorists from having to pay hundreds of dollars extra each year. The financial easing also allows Ms Gillard to slap down Opposition Leader Tony Abbott's repeated claims that the carbon tax would be a "big hit on your petrol bills".
"He's being trying to persuade Australians that petrol prices will go up, that's not true," Ms Gillard said.
As well, Mr Abbott had been claiming a carbon tax would be permanent and that a compensation package would not provide adequate assistance for households.
"And he's been trying to say to Australians, somehow he's got a magic pudding and everything he does comes for free," she said.
"Well it doesn't, it comes at a cost of $720 a year."
Ms Gillard was referring to the coalition's direct action package that it says will match Labor's carbon reduction target by 2020.
The prime minister also confirmed that self-funded retirees holding a commonwealth health care card will get the same assistance as pensioners, under a compensation package aimed at limiting the impact of a carbon tax on households.
The assistance will be delivered quarterly, but a start date for the first payment and tax cuts for other Australians is not yet clear.
"You'll see all of these details after a carbon price is finalised," Mr Gillard said.
It is still expected transport will be included under the tax, meaning fuel prices could rise for some sectors.
New pollution standards for vehicles will be introduced by 2018 and the fringe benefit treatment of cars was changed this year to remove the incentive to drive further to get a larger tax concession.
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