The fuel excise discount is set to end on Monday, four months after it was introduced.
In March, the Government reduced the excise (tax) fuel companies pay and pass on to consumers, responding to oil price hikes from the conflict in the Middle East.
Fuel companies buy supplies wholesale in advance, so higher prices may not be felt immediately after the discount ends.
The Opposition said the discount ending “takes relief away from families and businesses who are still under enormous pressure.”
Context
The Strait of Hormuz is a narrow waterway which normally sees 20% of the world's oil every day.
After the U.S. and Israel struck Iran in February, Iran closed access to the Strait to non-Iranian vessels.
The U.S. later positioned ships at the entrance to the Strait to block Iranian ships.
In June, the U.S. and Iran signed a deal that included the Strait being re-opened.
Earlier this month, U.S. President Donald Trump said the war has resumed.
Fuel excise
The fuel excise is effectively a tax on petrol.
It has existed since 1901.
Usually, consumers pay 52.6 cents per litre of petrol in tax for both petrol and diesel.
(Note: The fuel excise is technically paid by the manufacturers, but they ‘pass it on’ to the customer.)
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In March, Albanese announced the fuel excise would be halved until the end of June, reducing the cost of fuel by 26.3 cents per litre.
From July, the Government reduced the discount to a 16-cent-per-litre reduction.
The excise is 36.6 cents per litre until 2 August, when it will go back to 52.6 cents.
On Thursday, Treasurer Jim Chalmers confirmed all discounts on the excise will end from Monday.
“It was never the Government’s intention for that to be permanent,” he told reporters in Brisbane.
“People shouldn’t expect that that fuel excise support will continue beyond the weekend.”
Govt advice
In March, the Government launched its National Fuel Security Program.
It said Australia was at level two, and told people: “Only buy the fuel you need”.
It ran a $20 million ad campaign encouraging Australians to adopt “simple, practical behaviours” so fuel could be prioritised.
On Friday, the office of Energy Minister Chris Bowen confirmed to TDA that Australia remains at level two.
Opposition
A spokesperson for Opposition Leader Angus Taylor told TDA “the relief has made a difference at the bowser”.
They added, however that the Government “has now decided to take it away from families and businesses who are still under enormous pressure.”
The spokesperson also flagged the Coalition’s calls to introduce the discount before it was adopted.
