Fuel prices to rise after fuel excise tax reintroduced

Fuel excise ends today: When will petrol prices rise?

Back in March, the Morrison government announced it was halving the fuel excise tax for 6 months. That 6 months expires today (September 28).

This means that from tomorrow drivers are facing an extra 25 cents per litre – although you may not see that increase straight away.

Why was the tax cut announced?

The price of fuel has been rising across the globe, thanks in part to Russia’s invasion of Ukraine. Russia is one of the world’s largest oil suppliers and the war has affected the global supply chain. 

The cost of living had also been rising, with things like groceries and rent becoming much more expensive. In response, the government introduced a number of measures as part of its 2022 budget.

At the time of announcing the tax cut, former Treasurer Josh Frydenberg said the move would save families about $30 a week (on the basis of 2 cars). 

With the tax returning, one 60-litre tank could cost around an extra $15.

Even with the tax cut, fuel prices have increased, surpassing $2 per litre.

So what happens now?

Despite the 6-month fuel tax cut expiring, drivers won’t have a huge price shock when they next visit the pump.

According to the Australian Competition and Consumer Commission (ACCC), “there will be no uncharacteristic or abnormal retail price increases in the days leading up to, on the day of, or after the reintroduction of the full rate of fuel excise”.

In fact, the ACCC explains that fuel prices are dependent on global factors and as such they will fluctuate naturally. 

Also, the reintroduction of the excise might take up to 6 weeks to filter down to the pumps.

But, higher prices are inevitable.

According to Finder research, almost one-third of Australians are already finding petrol one of the expenses that causes them the most stress.

In fact, 13% are saying it is a reason for giving up petrol cars and making the switch to electric vehicles.

“Fluctuating fuel prices are putting a lot of financial strain onto the lives of Australians, and it’s only set to get worse,” said Finder’s money expert Sarah Megginson.

Compare fuel prices and save

Following the reintroduction of the fuel excise tax, the ACCC warns customers to shop around for the best fuel prices. 

The group says that average prices between various parts of the petrol price cycles can vary by around 20 to over 40 cents per litre.

According to ACCC, motorists who fill up at independent chains will save compared to those who shop only at major-branded petrol stations.

“If you've ever filled up the car and then driven past a service station 10 minutes away with a much cheaper price, you'll know it pays to shop around. Luckily, there are plenty of apps that do the legwork for you,” Megginson adds.

“Depending on where you are, you could get a government app, such as the NSW Fuel Check app or WA's FuelWatch.

“There are also plenty of independent apps such as MotorMouth and FuelPrice Australia, plus some options through existing apps for brands, including NRMA and 7-Eleven.”