Australia Rejects Fuel Tax Relief Amidst Rising Prices
Canberra rules out cutting fuel excise as prices climb to $2.30 per litre, while a proposed 'shield' against oil shocks is dismissed.
Australian drivers are facing increased fuel costs as petrol prices surge across the nation's five largest cities, reaching approximately $2.30 per litre. Diesel prices have also risen by about 40 cents per litre, attributed to global conflicts in the Middle East impacting oil shipping routes.
In response to the rising prices, the government has ruled out immediate cuts to the fuel excise tax. A proposal by the Coalition to automatically halve the fuel excise when Brent crude oil averages over $100 per barrel for two weeks has been rejected by the Labor government.
Finance Minister Katy Gallagher stated that the government does not support the Coalition's proposal, describing it as an "unfunded, uncosted promise." She indicated that the government is focusing on more permanent cost-of-living measures, including adjustments to the tax system, rather than temporary fuel tax reductions. Prices are currently below the levels seen on March 31, when the fuel excise was temporarily halved, reducing prices by about 26 cents per litre.
Brent crude, the global benchmark oil price, has risen to around $104 per barrel, approaching its May peak. Some analysts predict that crude oil prices could reach as high as $150 per barrel due to depleted global stockpiles.
Despite renewed pressure to cut fuel taxes again, Senator Gallagher reiterated that the government has no plans to do so, citing concerns about the economic impact of one-off measures during a period of high inflation. She emphasized that the resolution of the conflict in the Middle East would be beneficial.
The Coalition claims its proposed "Fuel Price Shield" would save motorists 27 cents per litre, or approximately $15 per tank of fuel. They suggest this policy would be funded by a proposed 80 percent cut to the tobacco excise, which they estimate would recover $8 billion lost to the illicit tobacco market.
Critics have raised concerns that fluctuating fuel excise rates could encourage drivers to rush to fuel stations during supply shortages, exacerbating scarcity. Opposition spokesman Dan Tehan argued that this issue stems from Labor's alleged underinvestment in Australia's domestic fuel supply, including production licenses and the development of natural resources. The stance of the One Nation party on fuel excise cuts remains unclear, with a party spokesman affirming support for the policy without specifying a figure.