In a desperate move to stem losses in its letters division, Australia Post has applied to the consumer regulator to increase the price of standard postage to $1.

The planned price rise, which is subject to review by the Australian Competition and Consumer Commission, would result in a 42 per cent rise in the price of sending standard letters within Australia.

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Postage for standard mail is currently 70 cents.

The Australian Government recently regulated to allow the introduction of a two-speed letter service by Australia Post, which will distinguish between letters delivered at a priority and regular timetable.

Australia Post’s proposal also includes price increases for the delivery of large letters.

However, it is not proposing to increase prices for concession stamps and Christmas greeting cards.

ACCC chairman Rod Sims said the regulator would assess the application in terms of the Competition and Consumer Act.

“We will take into account various factors including how efficient it is in managing the impact of declining letter volumes and the extent to which price increases are required,” he said.

The advent of electronic email services in the last 20 years has eroded the mail carrier’s letters business, which posted an operating loss of $151 million in the six months to the end of December.

These losses have been nullified to some extent by the boom in Australia Post’s parcels business following significant growth in online shopping.

Australia Post chief executive Ahmed Fahour warned that the government-owned mail business could post a consolidated loss for the full year to the end of June.

Australia Post is due to submit its financial results in the next month.