Fuel prices fall as Australian servos fast-track excise cuts
Oil prices in Australia’s biggest cities began falling on Wednesday; retailers moved unexpectedly early to implement part or all of the federal government’s 26-cent-per-litre excise tax cut, before most plants had exhausted existing stocks and bought new fuel at cheaper prices.
The average price of unleaded petrol in Melbourne fell 16 cents to $2.43 a liter on Wednesday morning, from around $2.60 a liter on Tuesday, new figures show. Service stations across Sydney cut average prices by about 13 cents to $2.44 per litre.
Sharper cuts were recorded in other parts of the country: prices fell by an average of 15 cents in Brisbane and 18 cents in Hobart.
Adelaide had the sharpest fall, dropping prices by 25 cents to $2.34 per litre, while Perth had the smallest drop, by 7 cents per litre, to a citywide average of $2.44.
The Albanian government this week announced a temporary halving of fuel excise tax (a flat tax that adds 52.6 cents per liter to the cost of gasoline and diesel) to help ease the cost-of-living pressure on households from the war in the Middle East. In the month since the first US and Israeli strikes on Iran, attacks on oil fields and Iran’s de facto blockade of the Strait of Hormuz have crippled a fifth of the world’s crude oil supply – the natural resource converted into petroleum, diesel and jet fuel – and sent prices soaring to record levels across Australia.
The 50 per cent excise duty cut comes into effect on Wednesday, while Finance Minister Jim Chalmers said earlier this week it would take up to two weeks for the savings to fully work across the fuel network.
But fuel company sources, who did not want to be named, said some retailers preferred to take a short-term hit by transferring high-taxed stocks at discounted prices, which could be offset when excise duty returns to normal.
Diesel prices across Australia have risen more sharply than petrol; This is a major concern for many critical industries that rely on fuel, such as transportation, agriculture and mining.
NRMA figures showed the average diesel price also fell significantly on Wednesday morning. The average price fell by more than 11 cents per liter in Sydney and 15 cents per liter in Melbourne.
New capital city price figures compiled by the National Highways and Motorists Association have made it clear that some operators are opting to implement excise tax cuts immediately.
“Based on these prices, people will start to feel relief today,” NRMA spokesman Peter Khoury said.
However, Khoury added that the figures are only citywide averages, meaning lower fuel prices will not yet be reflected at every service station. “If you’re standing at your local servo and you haven’t seen an outage yet, they’re not doing anything wrong,” he said. “They wait until they can stock their tanks at cheaper prices, and this can take days or weeks depending on where the servo is located and how many customers.”
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Nick Toscano is an economic correspondent for The Age and the Sydney Morning Herald.Connect with: X or email.
Mike Foley is the climate and energy correspondent for The Age and The Sydney Morning Herald.Connect via email.
