Victorian motorists are being battered by the highest petrol prices on record despite the government still only collecting half the amount of fuel excise.

Although fuel costs are not expected to increase at the rapid rate seen in the first half of this year, consumers are being warned of potential spikes and of a 22c per litre jump when the tax returns to normal.

Prices in Melbourne peaked as high as 242.9c per litre on Tuesday while the average cost was 238c per litre.

The figures mean costs are well above where they were when the federal government temporarily halved its fuel excise to provide relief at the bowser. Australasian Convenience and Petroleum Marketers Association chief executive Mark McKenzie said prices were fluctuating but now seemed to be sticking within the same range.

“Volatility is creating all sorts of challenges but we’re not seeing the dramatic increase in prices we saw in the first quarter,” he said.

Mr McKenzie said there were “two streams of thought” about what happened next.

Opinion was divided about whether costs would fall by 25 per cent as other countries go into recession or if supply would remain tight and add 15 per cent to prices.

“With that sort of range no one really knows,” Mr McKenzie said.

“If the fuel excise was on you’d have to add another 22c to current prices.

“There’s nothing on the horizon saying there’s going to be downward pressure … The most optimistic approach would be that it’s going to be stable.”

Mr McKenzie said diesel was even more expensive because demand was being driven from backup power generation.

RACV’s head of communications Eleanor Colonico said Tuesday’s average price was the highest seen in the last month.

“The trend for fuel prices across Melbourne over the coming weeks will depend on a range of factors, such as levels of competition in different suburbs, wholesale prices and taxes, and other factors,” she said.

Consumers are being warned of a potential 22c per litre jump when the fuel excise returns to normal. Picture: David Crosling

“It is not uncommon for retailers close by to be selling fuel at different rates, so it’s important you keep an eye on the Fuel Tracker to obtain the best deal.

“It’s important to include independent retailers in your searches, who can often have some price flexibility.”

Federal Treasurer Jim Chalmers this week flagged the fuel excise discount was likely to end in September and the relief on petrol prices would end.

“We have the same view on this that we’ve expressed on both sides of the election,” he said.

“It would be incredibly hard to be able to afford to continue some of this cost of living relief, this specific relief, indefinitely.

“Obviously, we factor in the conditions as they evolve, and the budget and all of the rest of it. But nothing has substantially changed to make me think that we could continue that indefinitely, or even for a substantially longer period than September.”

Extracted in full from: Petrol prices expected to jump when fuel excise increases | Herald Sun