The Rudd Government has however ruled out the option, saying that motorists should not be directly taxed, in addition to the Government's already near 40-cent per litre fuel excise.

"The Australian Government does not support the use of a carbon tax," a spokeswoman for Climate Change Minister Penny Wong said.

Oil companies say that either way motorists will end up paying more, despite whether a direct tax is applied, or companies are forced to use the carbon emissions trading scheme under consideration by the Government.

With fuel prices at record high levels, most Australians are already reducing their travel requirements, with petrol now at least a third higher than its average cost in the early 2000s.

Despite declaring massive rising profits, oil companies say the onus will be on drivers to pay the price for use of the petrol.

The carbon trading scheme will be further assessed later this year, following the delivery of Professor Ross Garnaut's report into the state of the Australian economy and climate change.

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