The Albanese government has been urged to extend fuel excise relief over warnings that rolling it back will mean higher costs for Australians struggling with the cost-of-living.
Nationals MP David Littleproud called for transport sector support to continue, arguing that higher fuel costs will quickly flow through to supermarket prices.
‘There is need to continue the support to the transport industry,’ he told Weekend Today on Sunday.
‘That won’t be inflationary, because it’s actually about the cost of your groceries [being] kept in check, because the transport industry will pass it on, to make sure you’re not paying more at the checkout.’
US President Donald Trump said an agreement with Iran was imminent, which would reopen the Strait of Hormuz.
The passage is a key shipping lane that carries around one-fifth of the world’s oil supply and has been severely disrupted since the conflict escalated in February.
But Littleproud has warned that Australians should not expect any immediate benefit, even if tensions subside.
‘It won’t see fuel prices go down immediately because of the war finishing in the Strait of Hormuz and Iran,’ he said.
David Littleproud (pictured) has called for the cut to fuel excise to be extended past July 1
It will now revert to its full rate from July 1, adding roughly 32 cents per litre back onto petrol and diesel prices (pictured, a customer at a Melbourne fuel pump)
‘The reality is there’s a long tail. We’re at the end of the supply chain here, and it will take time for that to follow through into our prices.’
Littleproud’s comments come as motorists brace for a sharp rise in fuel prices from July 1 as the temporary halving of petrol and diesel tax levies will end at the close of the financial year.
Energy Minister Chris Bowen said the policy was always intended as short-term relief and would not be extended.
‘We’ve been very clear, this was a temporary reduction in the excise that was always intended to be temporary,’ he said on Saturday.
‘The Prime Minister and Treasurer have been clear, they will always examine the latest information, but our intention is for it to come off at the end of the month.’
The excise was cut from 52.6 cents per litre to 20.6 cents on April 1 in response to economic fallout from the conflict in Iran.
It will now revert to its full rate, adding roughly 32 cents per litre back onto petrol and diesel prices.
Industry figures have also warned that the increase will be felt immediately at the bowser.
The Albanese government has signalled there will not be an extension to the temporary move
NRMA spokesperson Peter Khoury said Australians should expect petrol prices to climb to around $2 per litre, with diesel potentially reaching $2.50.
‘We expected them to reintroduce it. They never intended to extend it,’ he said.
‘They did say that they would measure the situation closer to the deadline though.’
The decision follows months of government support aimed at cushioning households from global energy volatility.
The excise cut, combined with a 10.9 per cent GST-related rebate agreed to by states and territories, has cost the federal budget close to $3billion since April.
While the policy eased pressure at the pump and tempered inflation, which fell from 4.6 per cent in March to 4.2 per cent, its end is expected to reverse some of that relief.
