Calls for fuel relief to be extended as suppliers warn of panic buying
One of Australia’s most senior MPs has pushed for an extension of the fuel excise cut for transport companies, before the scheme is scheduled to finish this month.
After the fuel crisis that resulted from the outbreak of the Middle East conflict, the government enacted several measures to bring down the price of fuel, including halving the fuel excise and temporarily removing the heavy vehicle road users tax.
David Littleproud said it would take time for prices to fall even if the Strait of Hormuz was reopened. Today
However, both of these measures end on June 30, and the government said the schemes would not be extended except for extraordinary circumstances. This could result in the price of fuel spiking by up to 32 cents a litre overnight.
Speaking to Today, Nationals MP David Littleproud called on the government to extend assistance to transport companies, warning the flow on effect could hit millions of Australians in a cost of living crisis.
“There is need to continue the support to the transport industry,” he said.
Petrol prices will rise when the government's temporary fuel excise cut ends. Joe Armao
“That won’t be inflationary, because it’s actually about the cost of your groceries [being] kept in check, because the transport industry will pass it on, to make sure you’re not paying more at the checkout.”
There could be wider relief in sight if US President Donald Trump is to be believed.
He claimed a deal with Iran would be signed imminently, which would include the reopening of the Strait of Hormuz to international shipping traffic. Around one-fifth of the world’s oil travels through the critical waterway, which has been all but closed since conflict began in February.
However, Littleproud warned it would take time for these positive impacts to flow through to the bowser in Australia.
“It won’t see fuel prices go down immediately because of the war finishing in the Strait of Hormuz and Iran,” he said.
“The reality is there’s a long tail. We’re at the end of the supply chain here, and it will take time for that to follow through into our prices.”
Experts are also warning the imminent end of the fuel excise reduction – which reduced the tax from 52.6 cents to 26.3 cents per litre – could lead to panic buying from motorists.
Energy Minister Chris Bowen said fuel storage levels in Australia had reached record highs. Nine
“We have a huge volume of fuel in storage, but we have to be prepared for sales to spike in the days before the return to the full excise rate,” Malcolm Roberts, chief executive of the Australian Institute of Petroleum, told The Sydney Morning Herald.
“We saw a sharp surge in sales at the outset of the Iran conflict, which hammered distributors – we don’t wish to see a replay.”
Connor McGoverne, Federal Politics Reporter for 9News, believes the impact of the fuel excise reverting to its pre-war level would have less of an impact than some may fear.
“It still won’t be as expensive as the peaks of the Middle East conflict,” he said.
“While the government removing the 32 cent a litre fuel excise cut at the end of this month isn’t exactly good news for households, but it’s not as bad as things were.”
Energy Minister Chris Bowen said the national fuel stockpile had reached record highs after some doubts at the beginning of the conflict.
He said there are 45 days’ worth of petrol, 39 of diesel and 32 of jet fuel in Australia.
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