Winding back or scrapping the diesel fuel rebate would amount to a tax hike that would be likely to send some commercial fishers to the wall, the sector has claimed.
Amid speculation Treasurer Joe Hockey's razor gang is eying off the $5.5 billion fuel tax credit scheme, the WA Fishing Industry Council warned the Government against taking it away from professional anglers.
Under the scheme, operators in primary industries such as farming, fishing and mining are given a rebate for the excise and customs they pay on fuel for certain off-road purposes.
Calculated at 38 cents a litre, the rebate is worth millions of dollars for some businesses.
John Harrison, the chief executive of WAFIC, said yesterday that reducing the rebate or scrapping it could ruin some fishing operations, which used millions of litres of diesel a year.
Mr Harrison also said it would be grossly unfair if the rebate was removed because many fishers barely used sealed roads, which the excise was levied to build and maintain.
"If the rebate is removed or reduced it is effectively a new tax on the fishing industry," Mr Harrison said.
"The fuel excise is for road users - the fishing industry does not catch fish on roads.
"Rumours and speculation about a reduction of the rebate are serious and if this was carried out by the Abbot Government it will have incredible impacts on fisheries around Australia.
"The impact would see the demise of some fishing fleets causing job losses and a reduction in the supply of seafood to Australian domestic markets."
Mr Harrison said the Government had "apparently assured the mining industry there had been no change to the fuel rebate" and called for fishers to be extended the same courtesy.
Concern among primary industries over the future of the rebate scheme emerged earlier this month when the Government confirmed savings from it were a "live option".
The scheme costs the Commonwealth about $5.5 billion a year.
One option that was reportedly being considered involved cutting the rebate by 3.5 cents a litre after $100,000 of credits had been collected.
However, any move to change the scheme would be furiously opposed by miners, farmers and commercial fishers.
It could also drive a wedge through the Federal Coalition amid vows from the National Party to oppose reductions to the fuel rebate.