When does the Australian fuel excise cut end?
In a big win for motorists who are doing it tough, the federal government has announced it will only reinstate half of the 50 per cent fuel excise in Australia for the month of July, extending the relief Aussies can expect at the bowser.
Under the original arrangement, the 50 per cent cut to fuel excise was to expire after June 30, but over the weekend prime minister Anthony Albanese announced relief measures would extend beyond the initial three-month commitment, calling it “the sensible thing to do”.
This means drivers will save 16 cents per litre off fuel from July 1 until August 2, half of the 32¢ discount that has kept prices in check since the excise cut was introduced on April 1.
With the average price of unleaded petrol sitting at about $1.65 per litre for the month of June, the price will likely rise above $1.80 once the excise cut is halved.
Diesel prices are currently hovering around $1.97 per litre on average, meaning customers can expect to pay more than $2.10 per litre from the beginning of July.
When the United States and Iran signed a memorandum of understanding last week, it provided hope that the situation in the Strait of Hormuz, which has been driving up world oil prices, might be resolved.
But just days later the fragile peace deal seemed on shaky ground, with Iran and the US trading barbs in the media and conflicting views about when or if the strait would reopen.
“We know that the cut to the fuel excise has really helped households, whilst the war in the Middle East has impacted on petrol prices here," said minister for finance, Senator Katy Gallagher, when the reinstatement of the excise was first mooted.
The government has faced pressure to extend the excise, as many Australians continue to wilt under increased cost-of-living pressures.
When will prices begin to increase?
When the federal government reinstates excise to 75 per cent from July, motorists can expect to see fuel prices steadily increase in the subsequent weeks.
The price applies to fuel from when it is purchased at a wholesale level. Given most retailers stock a few weeks’ worth of fuel at any point in time, the measure should theoretically take some time to trickle back through.
How much will fuel prices increase?
This is anyone’s guess. Although there is expected to be some form of increase across petrol and diesel prices in Australia with the reintroduction of the excise, comparatively low crude oil prices are expected to “cushion” some of the blow, according to NRMA spokesman, Peter Khoury.
“Global oil prices have been falling – for both tapas and gasoil, the key indicators for petrol and diesel in Australia. They’ve been falling 17 per cent for gasoil and 13 per cent for tapas. The hope is if the peace deal holds and the strait opens we will see further falls,” Khoury said.
“That means some of the increase will be offset by the falls in oil prices. It will cushion some of the impact of the excise going back on.”
When was the fuel excise cut introduced?
On March 30, Prime Minister Anthony Albanese announced that following a national cabinet meeting, the fuel excise would be halved for a period of three months.
The measure reduced the price of fuel down by 26.3 per cents per litre (cpl), reducing the cost of a 50-litre tank by $13 and an 80-litre tank by $21.
Average regular unleaded prices in NSW were at 250.8 cpl on Monday March 30, but have since fallen as low as $1.50 per litre.
For many motorists, the end of the petrol excise cut is likely to increase the cost of filling up a tank of fuel by around $10.
As an NRMA member you can save up to 13 cents per litre every time you fill up at participating Ampol Foodary locations. Simply download the My NRMA app and show the QR code when you pay to receive your member discount.
