The Coalition has challenged Prime Minister Anthony Albanese to extend the $2.9 billion temporary cut to fuel excise in a move to exploit discontent over the cost of living when petrol prices have exceeded $2 per litre in some cities.

Liberal and Nationals MPs are preparing to back the extension despite the fact they voted only months ago to pass a law that ensured the temporary budget measure would end on September 28.

The move sets up another fight over a budget deadline after Albanese shifted position two weeks ago and agreed to extend the $750 paid pandemic disaster payment for workers with COVID-19 who had to go into isolation.

While the original COVID-19 payment ended on June 30, the Prime Minister agreed to reinstate it until September 30 after calls from the states and the federal Coalition.

Opposition Leader Peter Dutton cleared the way for the fight over fuel by asking Albanese in parliament on Monday about what the government would do to help Australians deal with rising costs including on fuel.

“Households are facing rising power bills and your plan to address this is in disarray,” Dutton said in question time.

“Will your government compound the pressure on household budgets by not extending the fuel excise relief? Why is Labor making a bad situation worse?”

Albanese did not rule out an extension to the fuel excise cut but expressed surprise at the question and reminded parliament that Dutton was one of the federal cabinet ministers who decided on the excise cut and its September 28 expiry date.

“I point to the fact that he was in the cabinet that put together the budget, it had the end date for the measure he talks about,” the Prime Minister said.

The fuel policy was part of the March 29 budget and halved the rate of petrol and diesel excise from 44.2 cents per litre to 22.1 cents per litre in response to the surge in global oil prices after Russia invaded Ukraine on February 24.

Coalition leaders at the time, including then prime minister Scott Morrison and then treasurer Josh Frydenberg, insisted the measure would have to end on September 28 as planned, but Liberal and Nationals MPs are now saying they could support an extension.

“We made that decision because people were hurting,” one MP said of the original cut. “They’re still hurting.”

Another MP said there was “definitely” support within the party room for an extension and the question could come up in the regular meeting of Liberal and Nationals MPs in Parliament House on Tuesday morning.

But some MPs are worried that Dutton has made a “captain’s call” on fuel excise without consulting his colleagues when the Coalition has claimed to take a firmer line on returning the federal budget to surplus.

The final policy, one MP cautioned, would depend on economic circumstances at the time the excise cut is due to expire.

The national average retail price for petrol was 181.7 cents per litre last week, the Australian Institute of Petroleum said on Monday, with the most expensive city being Canberra, where the average was 207.3 cents per litre. The average was 174 in Sydney and 185.5 in Melbourne.

Extracted in full from: Peter Dutton readies to fight to keep $2.9b fuel excise cut going (