Fuel costs to creep up as states back excise return
Drivers will pay $10 more to fill a 65-litre fuel tank when the tax break designed to combat rising fuel prices comes back.
The move comes after dire warnings that if the full reduced fuel tax comes back, grocery and transport costs will rise and holidaymakers will stay at home.
The tax will start to return to servo prices starting July 1.
On the same date, in case of a partial refund of the heavy vehicle road user fee, truckers will have to pay 16 cents per liter in addition to the returned SCT.
That means $64 more for the 400-litre fuel tank.
Tax cuts, previously due to expire at the end of June, are now being phased out as part of a plan drawn up by the federal government and approved by state premiers at a national cabinet meeting on Monday.
The 32 cents per liter discount that started on April 1, following the war in Iran and the closure of the Strait of Hormuz, caused fuel prices to rise.
Oil prices in the capitals are approximately $1 per liter lower than on February 28, when the war began; The price of diesel is about 20 cents more per liter than when missiles began firing in the Gulf.
The federal government said on Sunday that bringing back the excise duty piecemeal would increase cost of living relief and prevent fuel supplies from being depleted.
“Australians did not choose this war, but they continue to face the costs and consequences,” Finance Minister Jim Chalmers said on Monday as he introduced legislation to extend the consumption cut.
“This cost of living relief…is temporary and has been reduced.”
States will continue to deliver 5.7 cents of the discount, currently 16 cents per litre, to their GST pockets, which was also agreed at Monday’s national cabinet meeting.
It comes as farmers and miners oppose calls to cap or cancel the fuel tax credit, which refunds fuel consumption tax for businesses that operate HGVs.
The groups argue they should continue to receive refunds for not driving on roads funded by fuel tax revenue.
But resource boss Andrew Forrest described the scheme as a “long-running joke” and said the rebate should be capped at $50 million per business per year.
Fuel tax credits are estimated to cost $10.7 billion in the 12 months to July 2027, according to budget documents.
“They are representing their own views as a company,” Minerals Council of Australia chief executive Tania Constable said on Monday, referring to Mr Forrest’s company, Fortescue.
“We are racing for minerals around the world, everyone is after us.”
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