Petrol prices are creeping to $2.40 a litre, but the Morrison government has ruled out a move to cut the cost for struggling Aussies.

A tax cut that could lighten the load for some Australians has been ruled out by the Morrison government.

Petrol prices across the country have soared to record highs after Russia’s invasion of Ukraine pushed crude oil prices to an eight-year high.

Treasurer Josh Frydenberg is now facing calls to cut the fuel excise, which is taxed at 44 cents per litre, as prices creep towards $2 a litre.

Melbourne motorists face paying up to $2.40 a litre for standard unleaded petrol within the next month as international oil prices continue to spike.

Industry experts believe prices will stay high – and could even remain above $2 a litre for the rest of the year.

In 2001, former prime minister John Howard froze the excise after soaring oil prices sent the cost of fuel up towards $1 per litre.

But Energy Minister Angus Taylor has ruled out a policy repeat.

“We have no plans to do that,” he said.

Mr Taylor argued the excise was required so the government could keep “road building”.

“We see the pain people are feeling at the pump,” he added.

“The excise is used to fund road spending … And we want to keep that road building going on.

“As I drive around, during the floods, I see how much more work has to go into our roads in the coming years and that has to be paid for.”

Anthony Albanese has not ruled out cutting the fuel excise, if Labor is elected at the upcoming federal poll.

The opposition leader on Wednesday said rising fuel prices had been putting pressure on household budgets before Russia even invaded Ukraine.

“I don’t rule anything out,” Mr Albanese told 3AW.

“We think that everything, in terms of making a difference to people’s pressures on their living standards will be given proper consideration.

“But they will be given proper consideration given the fiscal position as well.”

Mr Albanese said his party would wait to see what measures were contained in the March 29 federal budget.

He said wages weren’t keeping up with cost of living pressures, including the soaring cost of meat, vegetables and rent.

“It’s really tough out there, there is no question about it,” he said.

“People need assistance and people need structural reform in the long term.”

It comes on the back of jump in brent crude oil prices and talk of the US and Europe banning Russian oil imports because of the invasion of Ukraine, although Germany has since stepped back from that measure.

And the flow-on effects could also mean higher prices for food and other goods as transport companies pass on their operating costs.

KPMG chief economist Brendan Rynne said a small rise in prices at the bowser was expected within two to three days but then a jump by as much as 20 per cent was possible in coming weeks.

“So it might be nudging $2.40 (for standard fuel) within the next month but it shouldn’t stay there for long,’’ Dr Rynne said.

But prices will remain higher than motorists had seen in recent times, he said, staying in the $2 range for the rest of the year.

Unleaded 91 prices across Melbourne on Tuesday varied between $1.80 and $2.02 a litre, while premium fuel such as unleaded 98 was as expensive $2.31 in South Melbourne, according to PetrolSpy.

RACV head of communications and engagement Andrew Scannell said petrol prices had risen steadily since January 1 when fuel was $1.54 a litre.

“Given current prices the RACV recommends motorists not pay above $1.98.8 per litre for unleaded fuel,’’ he said.

“The trend for fuel prices over the coming weeks is difficult to predict and will depend on a range of factors including geographical area, availability, international benchmark prices, taxes, the value of the Australian dollar relative to the US dollar, and levels of competition in different areas.’’

Extracted in full from: Melbourne petrol prices could hit $2.40 in the next month | Herald Sun