Petrol prices to skyrocket as fuel excise cut ends NRMA warns already too high

Australians are being warned that petrol prices at the pump will rise further despite falling global oil prices, a leading auto group warns.

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.

The government’s fuel tax cut ends at 11:59 p.m. Wednesday, pushing prices up another 25 cents a liter just in time for the long October weekend.

“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.