Petrol price relief! Fuel costs to come down temporarily as federal government cuts fuel excise by half

In good news for motorists, the Australian federal government has temporarily cut the fuel excise in a bid to lower petrol and diesel prices and address rising household costs.

The announcement was made yesterday as part of the Morrison government’s final budget before calling an election.

The fuel excise will be cut by 50 per cent from 44.2 cents per litre to 22.1 cents per litre.

Read more

Why Australian petrol prices are back on the rise Will petrol be free soon, or could motorists even be paid to fill up? Are Australians paying too much for petrol?

The federal Treasurer Josh Frydenberg said in his budget speech that the change kicked in at midnight last night and will flow through to the bowser within two weeks.

It will be a temporary measure lasting for six months, and it applies to petrol and diesel fuels.

The government has blamed the dramatic increase in fuel prices in the past month on Russia’s invasion of Ukraine.

According to the government, a two-car household that fills up once a week could save about $30 a week or $700 over six months.

The Australian Competition and Consumer Commission (ACCC) said that it would be keeping an eye on fuel retailers and ensuring that they comply with the excise cut.

“If retailers make false or misleading statements to consumers that they have passed on the savings when they have not, the ACCC will not hesitate to take appropriate enforcement action,” ACCC Chair Gina Cass-Gottlieb said.

The Australian Automobile Association (AAA) recently revealed that only 53 per cent of the fuel excise has been spent on the transport network in the past decade, despite the tax existing to pay for road transport.

The AAA has criticised the government’s move to cut the excise, saying it won’t help fix the road network that is in need of attention.

“The decision to booby-trap the Commonwealth Budget with a 22.1cpl fuel excise cut for the next six months will fix neither Australia’s transport tax problems, nor the factors driving up petrol prices. The AAA notes the change may possibly offer some short-term relief for motorists in a volatile global fuel market, but believes it generates more medium-term challenges than it solves,” the AAA said in a release.

As part of the 2022 budget, the AAA will receive $6.5 million to conduct “real-world” emissions testing of light vehicles, something the peak body of Australia’s motoring clubs has been requesting for years.

No new measures were included in the budget to increase the uptake of electric vehicles beyond what the government previously announced as part of its Future Fuels strategy in November last year.

That strategy saw the government commit $178 million to measures that will encourage the shift away from petrol and diesel cars, with an aim of having 30 per cent of all new cars sold by 2030 either electric or hybrid.