Australian petrol prices to skyrocket after fuel tax cut ends

Petrol prices at the pump will soon jump by 25c-a-litre as the fuel excise discount ends after Anthony Albanese 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.

Consumers should expect to see prices increase within days after the fuel excise cut ends at 11.59pm on September 28, NRMA’s Peter Khoury told Daily Mail Australia. 

The Morrison Government halved the fuel excise from 44.2c to 22c-a-litre in March for six months as prices skyrocketed.

Mr Khoury said GST would add another 3c-a-litre to the cost, pushing prices back up by 25c-a-litre at the bowser.  

‘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.’ 

Going on Monday’s petrol prices, to fill up an unleaded car with a 60-litre fuel tank the cost would, on average, rise from about $98.40 in Sydney to $113.40.

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)

Mr Khoury said the consumer watchdog, the ACCC, would be closely watching petrol prices to ensure retailers didn’t increase prices too early and by too much.

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 goes 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. We don’t want service stations to treat Australians like mugs so we’re watching this closely,’ he said.

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. 

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 

‘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.