Not helping were comments from the Russians that its fourth quarter exports will decline. In addition, the failure of talks to end the siege of Yasser Arafat's compound also contributed to nervousness among oil traders.

While the Howard Government may be concerned about the inflationary impact of higher oil prices, it will certainly not be worried about its impact on government revenues.

When the oil price was above $US30 a barrel two years ago, the government enjoyed a $480 million surge in collections under the Petroleum Resources Rent Tax.

Based on official forecasts, the government expects to earn $1.52 billion from PRRT this financial year. However, the recent rise in oil prices, if sustained, should mean government revenue from the PRRT as well as the GST will be substantially higher.

Opposition Treasury spokesman Bob McMullan called on the government to reveal how much extra revenue it was earning while bowser prices were up.