Motorists across the country are bracing for another rise in the cost of living – this time with rising gas prices.
The former Morrison government’s fuel excise tax halving, announced in its last federal budget in March, is due to expire on Thursday.
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After the excise duty reduction ends, drivers can expect to pay about 25 cents per liter more for gasoline – or about $15 more to fill a 60-liter tank.
But the increase is unlikely to be immediate, according to industry experts.
Why you might not feel the hit immediately
About 700 million liters of gasoline already in the tanks of service stations across the country have been purchased at the reduced rate.
While these stocks won’t last forever, they should temporarily dampen the rise in prices.
NRMA’s Peter Khoury said his organization, along with the consumer watchdog, will be keeping a close eye on petrol tanks.
“It will take several days in capitals and possibly even longer – up to two weeks – in regional areas,” he said.
“This is because gas stations will already have an existing stock before going to restock with fuel at the higher rates.”
The Labor government has repeatedly refused to extend the excise duty reduction due to budget constraints.
Treasurer Jim Chalmers said people shouldn’t see an immediate increase in the cost of gasoline.
“Fuel prices in most parts of the country are currently around 50c per liter below the peak recorded in July,” Chalmers said.
“The industry estimates that there will (will be) over 700 million liters of low excise fuel in the system when fuel excise is reintroduced.
“That’s 700 million reasons why the price shouldn’t skyrocket by 23c the night the excise duty exemption ends.”
Gasoline prices have risen dramatically ahead of the March budget, largely due to Russia’s invasion of Ukraine.
Russia is one of the world’s largest oil suppliers and global supply chains have been severely disrupted.
Australia is highly dependent on fuel imports, which means we are additionally vulnerable to volatility in international fuel markets.
There are other costs associated with what drivers pay at the tanker, including taxes and other fuel transportation and selling costs.
But today, more than six months after the start of the war, the average price of a liter of petrol is at a nine-month low, according to the Australian Institute of Petroleum.
The average price of unleaded gasoline fell by 0.9 cents in the week to September 16.
How much filling your tank could increase
When the excise duty reduction ends, the price per liter of gasoline is expected to rise by about 25 cents.
This includes 22c in excise and around 3c in GST.
For the average driver, it will ultimately cost about $15 more to fill up a 60-liter tank. For people who refuel every week, this equates to an additional expense of $60 per month.
But it’s unclear how long it will take for the price hike to kick in.
When the excise duty reduction came into effect, it took about six weeks before the full savings were passed on to the consumer.
The ACCC expects a similar lag this time around.
“We expect there will be no unusual or abnormal increase in retail prices in the days leading up to, on the day of or after the reintroduction of the full fuel excise rate,” he said. he declares.
“After the reintroduction of the excise, the ACCC will closely monitor wholesale and retail prices and will not hesitate to take action where there is evidence of misleading or misleading conduct, misrepresentation regarding the increase excise and retail prices, and anti-competitive behaviour”.