The cost of living has been rapidly increasing in recent years, putting additional financial strain on many households. In response to rising fuel prices earlier this year, the Morrison government introduced a 50% cut to the Fuel Excise Tax in March 2022.
Mr Morrison made claims the sudden increase in fuel prices earlier in the year were due to events well beyond Australian shores such as the war in Ukraine and stated the temporary fuel excise cut was feasible due to the current position of the economy at the time of his announcement.
The recently elected Albanese Government stated they would not continue the cut despite Mr Albanese scolding the Morrison Government in October last year with a twitter post that read; “Petrol prices are at record highs, putting major squeeze on family budgets across the country and the Morrison Government isn’t doing anything about it.”
According to the ACCC (Australian Competition & Consumer Commission), record international prices for crude oil and refined petrol were due to increased demand, production cuts by Russia and the OPEC (Organization of the Petroleum Exporting Countries) cartel and the war in Ukraine.
The ACCC’s latest quarterly petrol monitoring report for June 2022 revealed the average retail petrol prices in the five largest capital cities were 188.0 cents per litre (cpl), up by 6.1cpl from the March quarter. This was the sixth consecutive quarter in which prices increased. In real terms, prices in the June quarter were the highest since the September quarter in 2008, when average prices in 2021-22 dollars were 206.9cpl.
Retail prices then fell by about 35cpl in July as international crude oil and refined petrol prices declined due to an increase in supply from oil stockpiles, lockdowns in parts of China and a worsening global economic outlook.
“Motorists experienced savings because of the fuel excise cut at a time of record and rising wholesale prices. The excise cut prevented even higher prices due to international factors, largely driven by the war in Ukraine.” ACCC Chair Gina Cass-Gottlieb said.
“Since late June, average retail petrol prices have come down significantly, in line with decreases in international crude oil and refined petrol prices.”
When we asked Federal Member for Bass, Bridget Archer, about her opinion of the Fuel Excise Tax and whether motorists were being priced out of car ownership, this was her response:
“I continue to advocate for the best interests of our community and my call for an extension of the fuel excise tax is in line with the concerns raised with me from people all across Northern Tasmania who are concerned about the impact ending the excise tax will have on their budget. This is of particular concern given the rising costs we are all facing whether that is at the grocery store, paying an electricity bill or trying to meet sky-high rental costs or keeping up with increasing mortgage interest rates.”
“I do appreciate the Federal Government has many competing priorities however they have long been extremely vocal about easing cost of living pressures for Australians and the time for talk is over and they now must demonstrate how they will turn this talk into tangible action that will support our community.”
One Launceston local expressed the end of the Fuel Excise cut had left them feeling angry and concerned about the anticipated increase in fuel and the flow on effect for other bills such as grocery shopping. “When I first started driving, I can remember fuel being approximately $1.20 something per litre.” They said.
Following the excise reintroduction, the ACCC will be monitoring wholesale and retail prices closely and will not hesitate to take action if retailers make misleading statements on price movements or if there is evidence of anti-competitive behaviour (such as price collusion).
“We will shortly be engaging with fuel wholesalers and retailers to say that we do not expect to see uncharacteristic or abnormal wholesale and retail price increases in the days leading up to, and on the day of, or after, the reintroduction of the full rate of fuel excise.” Ms Cass-Gottlieb said.
“Motorists are reminded that prices will continue to fluctuate with changes in international prices and the exchange rate, as well as petrol price cycles in the five major capital cities. Our monitoring and analysis will assess and report on all factors influencing retail prices. The ACCC will continue its weekly reporting to consumers about what is happening to fuel prices and when to find the cheapest fuel.”
“Shopping around and using fuel price apps can help consumers find the cheapest petrol in their area. Our previous research has shown that buying at independent retailers and avoiding the top of the petrol price cycle in the five largest capital cities can save motorists a lot of money.” Ms Cass-Gottlieb said.