Aussies budgets are about to take another hit as the temporary petrol price cut at the bowser comes to an end.
The fuel excise reduction, which the former Morrison government imposed as part of its final budget, concludes at midnight on Wednesday.
There are fears petrol prices will skyrocket by more than 20 cents a litre over the coming weeks as a result.
Prices are already pushing $2 a litre in most states, with the excise still in place.
Fuel excise cut too costly
Labor said the Government could no longer afford the tax cut due to mounting budget pressures, ruling out any extension of the six-month timeframe.
"We feel the pain, we know that it is going to hurt households, which is why we haven't taken this decision lightly," Assistant Treasurer Stephen Jones told Sky News.
The cut to the fuel excise was introduced in March to temporarily help Australians struggling to cope with the rising cost of living and surging petrol prices due to the war in Ukraine.
The end of the cut will result in the tax on fuel jumping by 25.3 cents per litre, according to the competition regulator, the ACCC.
No immediate petrol price rise
But the federal government said that price hike should not immediately flow to the bowser because retailers purchased about 700 million litres of petrol beforehand.
Petrol stations have been put on notice, with the ACCC monitoring the situation closely.
"We would look very firmly down on any petrol station that has supplies purchased under the previous arrangement that sees the need overnight to jack the price up 23 cents a litre," Finance Minister Katy Gallagher said.
Cost of oil dropping
The NRMA's Peter Khoury has urged oil companies to ease petrol pain on motorists, saying the price of oil has plummeted to pre-pandemic pricing.
"Despite falling global prices and the full fuel excise tax not yet reinstated, prices in Sydney are approaching $2 per litre, meaning motorists are paying much more for fuel than they should be in the lead up to the October long weekend, he said on Wednesday.
"We need to see a correction immediately."
The head of the Australasian Convenience and Petroleum Marketers Association said the situation had changed from when prices spiked after Russia invaded Ukraine.
"If ever there was a time where you'd be talking about reinstalling the excise, it's probably about now," Mark McKenzie told the ABC.
"Recessionary pressures are actually pushing the global price down.
"We're likely to see prices after the excise on an average basis... lower than they were before the excise was cut in March."
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