Treasurer Josh Frydenberg has sparked speculation the government will cut fuel tax to lighten the load for millions of Australian families.

Calls are growing for the treasurer to cut the tax – which stands at 44c per litre – as the price at the pump threatens to reach $2 a litre in a matter of weeks.

Mr Frydenberg refused to be drawn on his plans for the excise last week, despite Russia’s invasion of Ukraine pushing crude oil prices to an eight-year high.

‘A lot of people have pushed that idea [of cutting the tax],’ Mr Frydenberg told 2GB’s Money News.

‘I don’t want to speculate what is or isn’t in the budget other than saying the money from that excise goes directly into fueling transport infrastructure projects.

Prices at the pump have surged towards $2 a litre in recent weeks as the Russia-Ukraine war puts pressure on international oil supply. Treasurer Josh Frydenberg last week refused to be drawn on his plans for the excise last week

‘That’s key in getting people to work and home to their families sooner and safe.’

NRMA spokesman Peter Khoury told Daily Mail Australia a reduction in fuel tax was not practical, regardless of surging oil prices.

‘It’s not really designed to fluctuate in accordance with the bowser,’ he said.

‘Oil prices are so volatile its not really practical to be lifting or cutting fuel tax all the time. It’s not a mechanism that is designed to go up or down.

He said the NRMA wanted the excise kept the same, apart from planned changes in line with the consumer price index, to help pay for better roads across Australia.

What we know is going to happen is there will be an increase in demand to maintain roads – particularly those that have been impacted by flooding in recent weeks,’ he said.

Mr Frydenberg is set to deliver the federal budget later this month ahead of the 2022 general election, which is expected to be held in May.

South Australian Senator Rex Patrick is among the federal politicians who have called for a reduction in fuel duty to help Australians feeling the pinch at the pump.

‘Businesses and households in regional and remote Australia are already feeling the squeeze from extreme fuel prices,’ he told The Weekly Times.

‘Despite the prime minister’s hopes, this situation is unlikely to be short term, and the pressure will be particularly acute for agriculture and other fuel intensive industries.’

The West Texas Intermediate spot price of crude oil last week hit the $US100 a barrel mark for the first time since July 2014, sparking fears petrol could soon become unaffordable for Australian motorists.

As Russian President Vladimir Putin prepared to invade Ukraine late last month, Reserve Bank of Australia Governor Philip Lowe said the war would be ‘a major new source of uncertainty’ when it came to energy costs.

‘Inflation in parts of the world has increased sharply due to large increases in energy prices and disruptions to supply chains at a time of strong demand,’ he said.

‘The prices of many commodities have increased further due to the war in Ukraine.’

Westpac chief economist Bill Evans said the Ukraine crisis ‘unnerved’ the Reserve Bank.

‘Prospects of higher energy prices and some further disruptions to supply chains, which weigh on near-term growth, must not deter central banks from the need to reign in inflation before the wages/ prices feedback loop takes hold,’ he said.

‘Despite the prime minister’s hopes, this situation is unlikely to be short term, and the pressure will be particularly acute for agriculture and other fuel intensive industries.’

The West Texas Intermediate spot price of crude oil last week hit the $US100 a barrel mark for the first time since July 2014, sparking fears petrol could soon become unaffordable for Australian motorists.

As Russian President Vladimir Putin prepared to invade Ukraine late last month, Reserve Bank of Australia Governor Philip Lowe said the war would be ‘a major new source of uncertainty’ when it came to energy costs.

‘Inflation in parts of the world has increased sharply due to large increases in energy prices and disruptions to supply chains at a time of strong demand,’ he said.

‘The prices of many commodities have increased further due to the war in Ukraine.’

Westpac chief economist Bill Evans said the Ukraine crisis ‘unnerved’ the Reserve Bank.

‘Prospects of higher energy prices and some further disruptions to supply chains, which weigh on near-term growth, must not deter central banks from the need to reign in inflation before the wages/ prices feedback loop takes hold,’ he said.

Extracted in full from: Josh Frydenberg sparks speculation fuel tax could be cut for Australians as petrol prices rise | Daily Mail Online

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