Drivers Brace for Petrol Price Hikes as Fuel Excise Cut Ends

Drivers across Australia are preparing for a significant increase in fuel costs as the federal government's temporary cut to the fuel excise tax concludes at midnight on August 3. This measure, implemented earlier in the year to alleviate a spike in fuel prices, will revert to its normal rate, adding 16 cents per liter to wholesale prices.

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Fill up as soon as possible.

According to RACQ principal economist Ian Jeffreys, the impact at the pump is expected to take approximately 10 days to fully materialize. Forecasts suggest that prices for unleaded petrol could climb to around $2.20 per liter, while diesel prices may reach approximately $2.60 per liter. Jeffreys advised motorists to fill up their tanks as soon as possible to take advantage of current prices before the increase takes effect.

The end of the excise cut coincides with a recent surge in global oil prices, which have risen from below $85 to about $90 per barrel in the past two weeks. Jeffreys noted that persistent tensions in the Middle East could keep these oil prices elevated, further pushing up prices at the bowser.

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If renewed tensions in the Middle East remain high, we could see these increased oil prices persist and ultimately push bowser prices up further.

Initially, the fuel excise cut removed 32 cents per liter, but this reduction was halved to 16 cents in July. The relief measure was introduced following disruptions to the global oil trade caused by the Iran war, which had halted naval shipments through the Strait of Hormuz. Australia imports about 90% of its refined oil needs from sources reliant on crude oil movements through this critical waterway.

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Hoarding fuel will not help the situation and it's dangerous, so there's no need to buy more than you need.

Energy Minister Chris Bowen urged motorists not to stockpile fuel, assuring them that Australia has several weeks' worth of reserves and more shipments are en route. He stated that the government is not considering an extension of the cut. The Australian Competition and Consumer Commission (ACCC) will monitor fuel retailers for any instances of price gouging. Opposition deputy leader Jane Hume criticized the government's handling of the measure, suggesting it would ultimately cost Australians more.

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Obviously we always monitor the situation and take steps as necessary, but our policy decision is clear.