Drivers brace for petrol price hikes as fuel excise cut comes to end

Drivers are bracing for more pain at the fuel pump as the federal government's fuel excise cut comes to an end. The excise, which for months was reduced to mitigate a fuel price spike, will return to its normal amount at midnight on August 3, adding 16 cents per litre to wholesale prices. It is expected the change will take about 10 days to flow through to the bowser, with prices forecast to increase to about $2.20 a litre for unleaded and $2.60 a litre for diesel, according to RACQ principal economist Ian Jeffreys. He advised motorists to "fill up as soon as possible" to avoid paying a premium. The end of the excise cut coincides with a jump in global oil prices from below $US85 a barrel to about $US90 in the past fortnight. "If renewed tensions in the Middle East remain high, we could see these increased oil prices persist and ultimately push bowser prices up further," Mr Jeffreys added. The fuel excise cut took 32 cents off each litre of fuel when it was introduced in March, but the reduction was halved to 16 cents in July. The cost-of-living relief was implemented after the global oil trade was impacted by the Iran war, which has brought naval shipments through the Strait of Hormuz to a halt. Australia imports the equivalent of about 90 per cent of its refined oil needs, including bowser fuel, from several sources that rely on crude oil movement through the Strait of Hormuz. Prices have surged in the past fortnight since a wobbly ceasefire between the US and Iran collapsed. Speaking to reporters on Saturday, Energy Minister Chris Bowen urged motorists not to stockpile fuel. He said Australia had several weeks' worth of unleaded and diesel reserves, with more shipments on the way. "Hoarding fuel will not help the situation and it's dangerous, so there's no need to buy more than you need," Mr Jeffreys said. Extension ruled out Mr Bowen said the government was not considering an extension of the cut. "Obviously we always monitor the situation and take steps as necessary, but our policy decision is clear," he said. Mr Bowen said fuel retailers could be penalised by the Australian Competition and Consumer Commission (ACCC) if found to be price gouging. "[The ACCC] are monitoring, they will take action and they have the powers to take action if they see actions they find illegal," he said. Asked whether she supported the cut ending, Liberal Party deputy leader Jane Hume said the government had failed to offset the cost of the measure. "That means that these cuts to the fuel excise are going to cost Australians more and more," she said. Drivers who spoke to the ABC on Sunday were ambivalent about the end of the excise cut. On the New South Wales South Coast, Vanessa Ward-Brown said while she understood the need to end the fuel excise, regional communities would struggle more with increased costs. "We don't have access to public transport like metropolitan areas do so we don't have any alternative other than to drive," she said. Vanessa Ward-Brown and Travis Fraser say fuel has been costly, even with the excise cut in place. Ms Ward-Brown recently bought a house in Batemans Bay with her partner Travis Fraser, but has been driving three and a half hours to Sydney every week for last two months to complete her postgraduate law degree. She said even with the fuel excise, the cost of commuting over that time was more than $1,000. "I've been literally trying to work out between here and Sydney where is the cheapest petrol along the way to save the most money," she said. In Adelaide, a motorist who did not share his name, said he thought the government was doing what it could. "It's tried to help out, but it's a big cost and, you know, we have to pay the price of the war, unfortunately," he said.