There is some potential unwelcome news for Australians looking for relief at the bowser.
The previous federal government’s six-month cut to the fuel excise expires on September 28, meaning the flat tax will the following day jump from 23 cents, to 46 cents per litre.
That extra 23c per litre will be reflected in petrol prices once fuel stocks subject to the outgoing levy are depleted. This should not happen immediately, given there’s usually supply in the system for a short period.
The Morrison government halved the excise in March in response to spiking fuel prices on the back of the Russian war against Ukraine. The timing also just happened to coincide with an impending election, focused on cost-of-living.
The flipside was the tax cut was costed at around $3 billion in excise denied to government coffers. It’s for that reason the new Labor government says it will not extend the excise cut beyond the original six months.
“We’re under no illusions this will be difficult for people. It’s a difficult decision for us to take as well,” federal treasurer Jim Chalmers told media.
While the Australian Competition and Consumer Commission (ACCC) found that the reduced fuel excise was being passed on to consumers, households during this period have still been spending record amounts on fuel.
That’s according to an August report from the Australian Automobile Association, which found the average weekly fuel cost for Australian households jumped by $5 to $100.39 in the second quarter of 2022.
Following the excise reintroduction, the ACCC says it will be monitoring wholesale and retail prices closely and “will not hesitate to take action” if retailers make misleading statements on price movements or if there is evidence of anti-competitive behaviour such as price collusion.
Meanwhile, two-thirds of Australians surveyed want every cent of fuel excise collected by the government to be spent on road and transport infrastructure specifically.
A recent motoring club survey found 67 per cent of people wanted 100 per cent of the flat fuel tax to go into transport needs, rather than into general revenue (which includes transport, but isn’t limited to it).
According to AAA research looking at the past decade, only 54 per cent of the excise has been re-invested in land transport projects.