A budget measure designed to immediately slash petrol prices is going to push the price of other critical supplies through the roof, a key industry is warning.

Grocery prices will rise after the fuel excise cut in the federal budget has left truckies worse off, the industry says.

South Australian Road Transport Association (SARTA) executive officer Steve Shearer says freight companies are the big loser from Tuesday’s budget, with the increased cost of fuel to be passed onto the everyday consumer in their weekly shopping bill after a vital diesel rebate was cut.

“The only way they’re going to be able to afford to make their payments is to charge the customer more in the first place,” he said.

“Everything you buy at the supermarket moves on multiple trucks … you’d be pushing up freight rates in a way that is going to be reflective on supermarket shelves.”

As well as increasing the price of the weekly shop, the cuts will mean freight companies are under pressure to keep themselves afloat.

“There are no ifs, buts or maybes about it – freight will go up,” he said.

“There’s no help for truck operators.

“We simply cannot afford to not have those funds available otherwise freight rates have to go up and it will be significant.”

Ahead of Tuesday’s budget, freight companies were hopeful the fuel excise would equal thousands of dollars in savings at the pump but Mr Shearer said operators would pay close to 20c more per litre for diesel after the government cut the Fuel Tax Credit rebate.

The rebate was a cashback of around 18c per litre on diesel before it was scrapped.

According to the federal government, heavy vehicle operators would receive a “net gain of 4.3c per litre” on diesel, but Mr Shearer said freight companies had been hit with a double-edged sword.

He said because of the government’s cut to the fuel excise trucking companies would need to reduce their fuel levy, normally applied to freight charges as a safety net to combat unpredictable fuel prices, as well as forfeit the 17.6c a litre cashback the rebate offered.

“Previously they’d get the 44c minus the road use charge so for every litre of fuel they would be banking 24c.

“If all they (the government) do is cut the fuel excise … the trucking industry is in trouble,” Mr Shearer said.

Mr Shearer said the issue was raised with the federal government as soon as SARTA became aware of it but no action had been taken yet.

Local truckie Darren Nicholas will save on his personal fuel bill but his employer Neil Mansell Transport will be one of the companies to feel the impact of the rebate reduction.

“Personally, at the moment it’s costing me $60-$70 a week just driving to and from work.”

Mansell Transport’s trips range from a 1000km round-trip up to 6000km, meaning thousands would be spent on higher fuel bills.

The Treasury provided a fuel excise fact sheet in response to The Advertiser’s request for comment but would not answer direct questions.

Extracted in full from: Federal budget fuel excise cut will drive up grocery bills, truckies warn | The Advertiser (adelaidenow.com.au)