Petrol prices Australia: Fuel excise cut expiring looms, adding $15 to the cost of a 60-litre tank of petrol

Motorists across the country are bracing for another hike in the cost of living – this time in the form of a hike in gas prices.

The former Morrison government’s six-month halving of fuel taxes, announced in the last federal budget in March, expires on Thursday.

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Once the excise tax cut ends, drivers can expect to pay about 25 cents a liter more for gas — or about $15 more to fill a 60-liter tank.

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But the surge shouldn’t be immediate, industry experts say.

Motorists across the country are bracing for another hike in the cost of living – this time in the form of a hike in gas prices. Recognition: DIEGO FEDELE/AAPIPICTURE

Why you might not feel the hit right away

Around 700 million liters of petrol, which is already in filling stations across the country, was bought at a reduced price.

While these holdings won’t last forever, they should temporarily mitigate the rise in prices.

The NRMA’s Peter Khoury said his organization and the consumer watchdog were closely monitoring petrol Bowsers.

“It will take several days in capital cities, possibly even longer in regional areas – up to two weeks,” he said.

“That’s because gas stations already have inventory before they refill fuel at the increased rates.”

Australian Treasurer Jim Chalmers. Recognition: LUKE COCH/AAPIPICTURE

The Labor government has repeatedly declined to extend the excise duty cut due to budgetary constraints.

Treasurer Jim Chalmers said people shouldn’t see an immediate increase in gas costs.

“Fuel prices in most parts of the country are now about 50 cents a liter below the peak recorded in July,” Chalmers said.

“The industry estimates that more than 700 million liters of reduced excise fuel will be in the system when the fuel tax is reinstated.

“That’s 700 million reasons why the price shouldn’t shoot up the full 23 cents on the night the excise tax breaks end.”

Gasoline prices rose sharply ahead of the March budget, mainly due to the Russian invasion of Ukraine.

Russia is one of the world’s largest suppliers of oil, and global supply chains have been severely disrupted.

Australia relies heavily on fuel imports, which means we are additionally vulnerable to volatile international fuel markets.

There are other costs associated with what drivers pay at the Bowser, including taxes and other costs associated with transporting and selling fuel.

But now, more than six months into the war, the average price of a liter of petrol is the lowest it has been in nine months, according to the Australian Institute of Petroleum.

The average price of unleaded gasoline fell 0.9 cents in the week ended September 16.

Motorists could soon pay $15 more for a 60-liter tank of gas. Recognition: JAMES GOURLEY/AAPIPICTURE

How much filling your tank could increase

When the excise duty cut ends, the price of a liter of gasoline is expected to rise by around 25 cents.

That is made up of 22 cents excise duty and about 3 cents GST.

After all, for the average driver, it costs about $15 more to fill a 60-liter tank with gas. For people who fill up weekly, that equates to an additional $60 per month outlay.

However, it is unclear how long it will take for the price surge to materialize.

When the excise tax cut went into effect, it took about six weeks for the full savings to be passed on to consumers.

The ACCC expects a similar delay this time.

“We anticipate there will be no uncharacteristic or abnormal retail price increases in the days leading up to, on the day of or after the reinstatement of the full tax rate on fuel,” it said.

“After excise duties are reinstated, the ACCC will closely monitor wholesale and retail prices and will not hesitate to take action if there is evidence of misleading or deceptive behavior, misrepresentation of excise duty increases and retail prices, or anti-competitive behavior.”

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