Petrol prices are about to skyrocket again after fuel tax cut expires – here’s how bad it could get
- The temporary 22c per litre discount on fuel tax ends at 11.59pm September 28
- Service stations expected to pass the increase on to customers at the bowser
- But Treasurer Jim Chalmers said 700 million litres of the cheaper fuel is stored
- He warned service stations not to ‘jack up’ their prices immediately
- Six month discount was brought in to battle soaring petrol prices in early 2022
Petrol prices at the pump will soon jump by 25c-a-litre as the fuel excise discount ends after Labor refused to extend it.
But drivers should be spared the financial pain of the astronomical prices seen earlier this year when the Russian invasion of Ukraine began, pushing average unleaded prices above $2 a litre.
Consumers should expect to see prices increase within days after the fuel excise cut ended at 11.59pm on September 28, NRMA spokesman Peter Khoury told Daily Mail Australia.
The former Morrison Government halved the fuel excise from 44.2c to 22.1c-a-litre in March for six months as prices skyrocketed but new Prime Minister Anthony Albanese’s Labor government has declined to extend the relief, which cost $3billion.
Mr Khoury said GST would add another 3c-a-litre to the cost, pushing prices back up by 25c-a-litre at the bowser.
Australians will be paying more at the fuel pump by October as the temporary cut on the fuel tax finishes (file image)
‘The excise is added at the wholesale level so we won’t see an increase immediately, retailers need to buy more stock and pass on the hike to customers,’ he said.
‘It depends on how quickly retailers sell what they have, which could be a few days or up to two weeks.
‘Urban areas will go through their product quicker and regional areas will follow.’
The cost of filling up an unleaded car with a 60-litre fuel tank would, on average, rise from $98.40 in Sydney to $113.40, based on Monday’s pricing.
In Melbourne it would go from about $99 to $114 and in Brisbane from about $103.80 to $118.80.
NRMA’s Peter Khoury said while prices will rise they shouldn’t reach the levels seen in early to mid 2022 (file image)
AVERAGE UNLEADED FUEL PRICES
Sydney 164.8c per litre
Melbourne 165.2c per litre
Brisbane 173.3c per litre
Adelaide 152.2c per litre
Perth 155.5c per litre
Hobart 171.5c per litre
Darwin 174.7c per litre
Canberra 178.3c per litre
Source: MotorMouth on September 19.
Federal Treasurer Jim Chalmers said on Tuesday there was ‘no reason’ for service stations to ‘jack up their prices’ on the same night the excise went back up.
He pointed to 700 million litres of fuel stored around the country that was bought at the lower price.
‘Prices don’t need to jump up immediately,’ Dr Chalmers said.
‘We don’t want service stations to treat Australians like mugs so we’re watching this closely.’
Dr Chalmers vowed the Australian Competition and Consumer Commission would be looking out for price gouging.
‘The reason that we’ve maximised the ACCC’s role in all of this is we want to make sure there’s not dodgy behaviour going on,’ he said.
‘We’ve been working closely with the servos and suppliers to understand that there are hundreds of millions of litres of fuel underground in tanks that was purchased at the lower price and so the ACCC and the government expect that the price of petrol shouldn’t shoot up at the bowser on Wednesday night by the full 23 cents if the normal market pressures are in operation.’
Federal Treasurer Jim Chalmers (pictured) said on Tuesday there was 700million litres of fuel stored at the cheaper price so retailers shouldn’t ‘jack up’ their prices too quickly
Mr Khoury said it was a ‘difficult decision’ to not extend the tax cut but his focus was on ‘responsible budgeting’.
‘We’re under no illusions it will be difficult for people (but) I think most people understand that the budget can’t afford to keep the excise cut going forever,’ he said.
Mr Khoury said prices would rise but they shouldn’t reach the levels seen earlier this year when fuel rose to more than $2.20-a-litre.
‘There’s been a positive trend with the international benchmark price,’ he said.
‘It was $160 a barrel and has now dropped by 60 dollars over a couple months to $100 a barrel.’
‘What pushed the prices up was global supply being affected by Covid supply chain issues along with Russia’s invasion of Ukraine and the associated sanctions on Russian oil.
‘There no shortage of fuel for Australia it’s just expensive, the market is volatile but those spikes earlier this year came down pretty quickly.’
Some economists criticised the fuel tax relief when it was introduced in the federal government’s budget citing the huge loss in revenue, estimated at $3 billion by Treasury.
Australia has also joined the G7 in imposing a price cap on Russian oil in a bid to limit Russian President Vladimir Putin’s ability to finance the war in Ukraine.
The temporary fuel excise cut
The fuel excise tax was halved from 12.01am on March 30 as part of the previous government’s budget.
The excise and excise equivalent customs duty (excise) rates for petrol, diesel and all other fuel and petroleum based products, except aviation fuels, was halved for six months.
For petrol and diesel, the rates were reduced from 44.2c to 22.1c per litre.
The halving of fuel excise rates will end at 11.59pm on September 28.