When does the Australian fuel excise cut end?

The fuel excise in Australia is expected to be fully reinstated on July 1 despite an admission from the Federal Government that it is considering extending relief measures beyond the initial three-month commitment.

Speaking on the Seven Network on Tuesday morning, Finance Minister Katy Gallagher said the government was contemplating extending a 50 per cent cut to the fuel excise despite a deal to end the war in Iran this week.

The government introduced the 50 per cent cut to the excise in March after regular prices in NSW exceeded $2.50 per litre. The three-month cut is due to be lifted on July 1 – in a move that is expected to raise petrol prices by about 30 cents per litre around the country – though Gallagher said it was “no secret that we’ll keep these matters under review”.

“Look, we have it under active consideration,” Senator Gallagher said.

“The war on the Middle East has had a significant impact here, and we’ve done what we can to try and help households through that time.

“You know, petrol prices have come down quite a bit. In most capital cities, they’re below where they were at the beginning of the war, and that’s because the fuel excise has helped, but also because the price of oil has come down.

“We know that the cut to the fuel excise has really helped households, whilst the war in the Middle East has impacted on petrol prices here.

“The PM said yesterday that we have this under consideration and that there’ll be plenty of notice given to people about any decision we take.”

Speaking separately on the Nine Network this morning, Labor frontbencher Amanda Rishworth also kept the door open, noting, “we’ll make decisions in the coming weeks”.

The government hasn’t ruled out anything in recent weeks, however the general consensus is the excise will be reinstated – especially after comments from the Federal Treasurer Jim Chalmers last month in the wake of better-than-expected inflation figures.

The government has faced pressure to extend the excise as many Australians wilt under increased cost of living pressures and rising inflation.

NRMA spokesman Peter Khoury said he expected the fuel excise to be reinstated in full on July 1, pointing to the government simply keeping its options open should oil prices spike again between now and then.

“What the government has been saying is they’re not going to extend those measures, however they are keeping their options open if something were to happen,” Khoury explained.

The current national average for unleaded petrol in Australia is $1.66 at the time of writing, meaning the reinstatement of the excise would push prices to about $2 per litre.

Meanwhile, with diesel prices currently sitting at $2 per litre, customers could expect to pay $2.30 per litre from the beginning of July.

When will prices begin to increase?

Should the government fully reinstate the full excise from July 1 as planned, motorists can expect to see fuel prices steadily increase in the coming weeks.

The price applies to fuel from when it is purchased at a wholesale level. Given most retailers stock a few weeks’ worth of fuel at any point in time, the measure should theoretically take some time to trickle back through.

How much will fuel prices increase?

This is anyone’s guess. Although there is expected to be some form of increase across petrol and diesel prices in Australia with the reintroduction of the excise, the reality is that a falling crude oil price is expected to “cushion” some of the blow, according to Khoury.

“Global oil prices have been falling – for both tapas and gasoil, the key indicators for petrol and diesel in Australia. They’ve been falling 17 per cent for gasoil and 13 per cent for tapas. The hope is if the peace deal holds and the straight opens we will see further falls,” Khoury said.

“That means some of the increase will be offset by the falls in oil prices. It will cushion some of the impact of the excise going back on.”

When was the fuel excise cut introduced?

On March 30, Prime Minister Anthony Albanese announced that following a National Cabinet meeting, the fuel excise would be halved for a period of three months.

The measure reduced the price of fuel down by 26.3 per cents per litre (cpl), reducing the cost of a 50 litre tank by $13 and an 80 litre tank by $21.

Average regular unleaded prices in NSW were at 250.8 cpl on Monday 30 March, but have since fallen below $1.70 per litre.

For many motorists, the end of the petrol excise cut is likely to increase the cost of filling up a tank of fuel by around $20.

As an NRMA member you can save up to 13 cents per litre every time you fill up at participating Ampol Foodary locations. Simply download the My NRMA app and show the QR code when you pay to receive your member discount.