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Pressure at the pump: Calls for petrol price relief mount ahead of Budget

Two Nationals MPs are calling on the federal government to cut the fuel excise as petrol prices reached eight-year highs above $2 a litre around Australia and as high as $2.30 in parts of Queensland.

Mar 14, 2022, updated Mar 14, 2022
Petrol prices are tipped to creep up in the days leading into Easter.

Petrol prices are tipped to creep up in the days leading into Easter.

Analysts were also tipping the price could exceed $2.50 in coming weeks if Russia’s invasion is protracted or intensifies.

Queensland Senator Susan McDonald and Victorian MP Anne Webster want the 44-cents per litre excise cut to help reduce cost of living pressures.

Senator McDonald says the government should also look at pausing at least a portion of the excise.

“We just can’t afford to absorb the prices that we’re looking at currently,” she told the ABC.

Ms Webster has contacted Treasurer Josh Frydenberg about providing relief at the bowser.

The cost of diesel has hit $2.30 a litre in some parts of Queensland.

The Australian Competition and Consumer Commission chair Rod Sims said the war in Ukraine was a major factor but prices were climbing well before Russia’s invasion. The previous high was in 2008, during the global financial crisis, when prices reached $2.12 in today’s dollars.

“It is tempting to point the finger at petrol retailers when prices are high but our data shows that late last year that 86 cents of every dollar spent by consumers at the bowser was outside the retailers’ control,” Sims said.

CommSec said the wholesale price was currently $1.98, which meant a bowser price of $2.10 was reasonable.

The NRMA’s Peter Khoury says truck fleets now paying more than double the average price of fuel compared to April 2020 will inevitably pass the price hike on to consumers.

“Diesel is the fuel that our economy runs on. Farming, agriculture and mining, transport, small businesses that run fleets,” he told the ABC on Monday.

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“This is coast to coast and we have never seen anything like it in history. Your family will feel it at the bowser, in the supermarket aisles and everywhere else.”

The Morrison government also faces pressure from Liberal premiers over the tax.

South Australian Premier Steven Marshall – who will face voters at the ballot box this weekend – has called for the excise to temporarily be halved as he fights to retain government.

NSW Premier Dominic Perrottet says he would welcome any cut in the excise to ease the soaring cost of living, while Tasmanian Premier Peter Gutwein has also lobbied the government for a cut.

While not ruling out a cut to the excise ahead of the federal budget being delivered on March 29, Prime Minister Scott Morrison says any cut might not make a difference given petrol prices have risen from around $1.70 to $2.20 – more than the full cost of the excise.

“The things we can do, we do, and the things we can’t do anything about, well, we understand them and work with other countries around the world to try and relieve those pressures,” he told the Nine Network on Sunday.

Assistant Treasurer Michael Sukkar said the budget would focus on the cost of living for households.

The fuel excise is expected to raise almost $50 billion over the next four years, with almost $47 billion to go toward land transport projects, according to the Australian Automobile Association.

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