The price of fuel could “creep up” over the next few days as a temporary cut to the tax excise comes off at midnight, senior Albanese government minister Mark Butler has warned.
Motorists are bracing for further bowser price pressure more than three months after the Albanese government first slashed the excise – a tax applied to wholesale fuel imports – as the war in the Middle East sent prices soaring.
A 32 cent per litre discount was cut in half in June, and from midnight on August 2 will be removed altogether.
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Mr Butler said the change, much like the last cut, would not result in an immediate jump in fuel prices.
“When half of the excise was returned a month ago, you saw the price creep up over several days, and I would expect the same to happen here,” the Health Minister told News24.
Health Minister Mark Butler said the change would not result in immediate price hikes. NewsWire / Martin Ollman. Credit: News Corp Australia
Mr Butler said the government had “been honest” about the impact the change would have at the bowser and that deflationary impacts would “equalise when it goes back to situation normal”.
However, pressed on whether the government had considered a continuation of the cut, Mr Butler said while relief was important it was also “important to ease the return to situation normal”.
“As the Prime Minister and Treasurer indicated over the last several weeks, we were watching this closely,” he said.
“We just think we’ve got to get back to a situation normal at some point, and we’ve decided to continue with our original plan to do that this weekend.”
Mr Butler acknowledged prices had already jumped in recent weeks off the back of renewed fighting between the United States and Iran, against which Washington and Israel launched a surprise attack on February 28.
That increase was “not because of any decision government has taken, but because of the turmoil in the Middle East,” Mr Butler said.
“It just goes to reaffirm that we’re all paying the price for this war, which can’t end soon enough.”
Petrol prices are expected to “creep up” this week when the temporary cut to the fuel excise ends. NewsWire / Nikki Short Credit: News Corp Australia
Opposition energy spokesman Dan Tehan also voiced hope for “a resolution to the war”.
“It’s given enough time now for us to be able to get our fuel supplies in order,” he told News24.
Mr Tehan said he wanted the government to focus on “reducing spending and cutting the cost to people of living at the moment”.
“Because that is the big issue, and if they can do that and focus on that, that’ll enable people to be able to deal with what is likely to be an increase as this excise relief comes off,” he said.
As of July 26, the average petrol retail price sat at 182.3 cents per litre, an amount which is likely to increase as the change filters down the supply chain.
The heavy vehicle road user charge rate will also return to its normal rate of 32.4 cents per litre from Monday, after it was cut to 16.4 cents per litre for liquid fuels, such as diesel.
