Australia petrol prices: Excise tax to expire at midnight with fuel costs set to soar

Australia’s fuel tax exemption expired at midnight – after tens of thousands flocked to the pump to get the last discount before prices skyrocket.

The federal cut introduced by the former Morrison government as an election sweetener ended at 11:59 p.m. Wednesday, which will push prices up another 25 cents a liter ahead of the long October weekend in New South Wales. .

Motorists dried up diesel supplies from a Mildura filling station on the NSW-Victoria border by midday, while Queensland and Western Australia are seeing similar situations develop with regional servos.

A gas station in North Queensland has reportedly sold 5,000 liters of fuel before lunchtime, more than the daily average of 3,000 liters.

Progressive Aussies were able to grab a gallon of unleaded for between $1.50 a gallon and $1.70 a gallon earlier this week, but prices had surged above $1.90 on Wednesday.

A popular petrol station in western Sydney saw a queue of more than 400 meters on a busy road with people looking to take advantage of the cheap prices.

Cars waited in the south lanes of Blaxcell Street in Granville to refuel at the Powerfuel servo.

The station was offering $1.56 per gallon for unleaded 91 on Wednesday, $1.70 for premium 95 and $1.95 for diesel.

A woman from Sydney’s Northern Beaches claims a gas station near her home in Pittwater jumped more than 42c per liter in the five minutes it took her to drive to the pump on Wednesday.

Due to the financial impact on Australians, motorists will pay an additional $15 to fill a 60-litre tank when the excise tax expires.

Experts also predict that higher gasoline prices will lead to higher food prices, as transportation takes up 17 percent of spending.

Bread, vegetables and other everyday items are expected to increase by two to four percent.

That means a $2.20 loaf of bread now costs $2.30, while a $4 gallon of milk now costs $4.15.

Drivers in NSW can save up to $800 a year on fuel using the government’s FuelCheck app, according to treasurer Matt Kean.

“Prices can vary widely between gas stations, so if you fill up on a 50-gallon tank and there’s a 20 cent difference between gas stations, you’ll save $10 by filling up at the cheaper ones,” Mr. Kean said.

Driving a few hundred meters further to a cheaper servo can really pay off and increase your budget.

The NRMA has called on fuel companies to cut prices as unleaded normals averaged $1.90 per liter this week in Sydney, Melbourne and Brisbane.

“Despite falling world prices and full fuel taxes not yet recovered, prices are approaching $2 per liter, meaning motorists are paying much more for fuel than they should,” said NRMA spokesman Peter Khoury.

Once the fuel tax hike takes effect, drivers will be able to pay roughly the same amount at the pump as earlier this year when prices rose after Russia’s invasion of Ukraine.

The NRMA said it was “concerned” about a 42 cents per liter gap between wholesale and retail gasoline prices in Sydney, the highest margin since May 2020.

“Prices are already unacceptably high today and we need to see a correction immediately,” said Mr Khoury.

He pointed out that prices are in stark contrast to the global trend of declining oil prices after peaking earlier this year amid sanctions on Russian oil.

“It was $160 a barrel and has now dropped $60 to $100 a barrel in just a few months,” he said.

“Australians are already dealing with the pressures of living. Let’s hope that after the excise tax is reintroduced, there will be more restraint (from retailers) than we have seen this week.’

The former Morrison government cut fuel taxes in half in March from 44.2 cents to 22.1 liters in March as prices skyrocketed, but the Labor government of new Prime Minister Anthony Albanese has refused to extend the exemption.

Mr Khoury said GST would add another 3c-a-litre to the cost, increasing prices at the bow by 25c-a-litre.

“The excise tax is added at the wholesale level so we won’t see an increase right away, retailers need to buy more inventory and pass the increase on to customers,” he said.

“It depends on how quickly retailers sell what they have, it could be a few days to two weeks.

‘Urban areas are moving through their product faster and regional areas are following.’

Federal treasurer Jim Chalmers said last week there was “no reason” for gas stations to “raise their prices” on the same night excise taxes went up again.

He pointed to 700 million gallons of fuel stored across the country that had been purchased at a lower price.

“Prices don’t have to skyrocket right away,” said Dr Chalmers.

“We don’t want gas stations to treat Australians like mugs, so we’re keeping a close eye on this.”

dr. Chalmers promised that the Australian Competition and Consumer Commission would look to push prices.

“The reason we’ve maximized the ACCC’s role in all of this is because we want to make sure there’s no untrustworthy behavior,” he said.

“We’ve worked closely with the servos and suppliers to understand that there are hundreds of millions of gallons of fuel underground in tanks purchased at a lower price.”

“So the ACCC and the government don’t expect gasoline prices to skyrocket by the full 23 cents on Wednesday night if normal market pressures continue.”

He added that it was a “difficult decision” not to renew the fuel tax exemption, but the government was focused on “responsible budgeting”.

Some economists criticized the fuel tax credit when it was introduced by former treasurer Josh Frydenberg in the March budget ahead of the election, citing the massive loss of revenue estimated at $3 billion by the Treasury.