Fuel excise cut ruled out as petrol prices hit 237.8c per litre
Deputy Prime Minister Richard Marles has ruled out another cut to the fuel excise, despite petrol prices reaching as high as 237.8 cents per litre in parts of Australia. The decision comes as the conflict in the Middle East drives global inflation and pushes up costs for Australian motorists.
Speaking to News24 on Sunday, Mr Marles said the government was not considering another reduction to the fuel excise. He pointed to other cost of living measures and the need for prudent budget management as priorities.
What we are focused on is other cost of living measures and managing the budget in the most prudent way possible, which gives us space to look at cost of living as we move forward, he said.
Background on the fuel excise cuts
The Albanese government reduced the import tax on fuel in April, cutting prices by up to 32 cents per litre. That reduction was halved in June and removed entirely in August. However, prices have climbed again in recent weeks due to the ongoing conflict.
The NRMA reports the average price for regular unleaded in Sydney now sits at 237.8 cents per litre, with expectations of further rises to the low-to-mid 240 cents per litre in the coming week.
Light at the end of the tunnel
While acknowledging the difficult international environment, Mr Marles said there would be light at the end of the tunnel for Australian households.
We continue to work with Australians in relation to cost of living. There will be a light at the end of the tunnel. But right now, what we're facing is an internationally inflationary environment, essentially stemming out of the conflict.
Reserve Bank rate hike expected
Mr Marles' comments come days before the Reserve Bank is expected to raise the cash rate earlier than planned. He noted that most advanced economies have experienced a rate rise in the last month due to global pressures.
Coalition proposes price shield
The Coalition has announced it would introduce a price shield, an automatic cut that would activate when the two-week average for Brent crude exceeds USD$100 per barrel. That threshold has been passed only twice in recent years, including at the start of the invasion of Ukraine and the beginning of the current conflict.
Liberal frontbencher James Paterson told News24 that Australians would welcome the relief provided by the shield, describing it as proportionate, sustainable and targeted.
Political point-scoring over fuel prices
Senator Paterson also drew attention to Anthony Albanese's past criticism of former prime minister Scott Morrison over fuel costs, questioning what current prices say about this Prime Minister.
US relations and the conflict
On the conflict itself, Mr Marles confirmed he had spoken with US Secretary of War Pete Hegseth but declined to speculate on Washington's plans.
Clearly, we spoke about this, but I'm not going to speculate on how the progress of the war continues. Ultimately, that is a matter for the United States and Iran, in that sense.
What does this mean for Australian motorists?
With the fuel excise cut off the table and prices expected to keep rising, Australian motorists face continued pressure at the bowser. The government's focus remains on broader cost of living measures, while the Coalition pushes for an automatic price shield tied to global oil prices.
Will fuel prices keep rising?
The NRMA expects prices to reach the low-to-mid 240 cents per litre range in the coming week. Further increases will depend on the trajectory of the Middle East conflict and its impact on global oil markets.