A discount on fuel prices will continue to be partially subsidised by the Federal Government, as it has been announced that the current reduction on the fuel excise of 32 cents per litre will be stepped down to 16 cents per litre in July.
The excise typically adds 52.6 cents to every litre of fuel sold, but as petrol and diesel prices soared in March due to the war in the Middle East, the Federal Government halved the excise to lower fuel prices.
The remainder of the discount was funded by state and territory governments, by forfeiting GST revenue.
The extra month of lower fuel prices is estimated to cost the Government $400 million in lost tax revenue, in addition to the
forecast $3.8 billion cost from the previous three months of fuel excise and heavy road user charge decreases.
Prime Minister Anthony Albanese said it would take time for Australia to recover from the impacts stemming from the war in the Middle East.
“The extension to the fuel excise cut we’ve announced today recognises that economic and fuel stability recovery will take time, and our action provides a graduated return to normal settings for the fuel excise,” Albanese said.
“We’ll continue to do what we can to shield Australians from the worst impacts of this war including securing additional fuel from our partners.
“Despite the welcome and substantial drop in the price of petrol recently, we recognise people are still under pressure. This extra month of fuel discount will help Australian motorists and businesses with the cost of living as this support tapers off.”
War in the Middle East, which began in late February, has resulted in massive disruption to global oil supply.
Ships carrying oil produced in Persian Gulf states such as Saudi Arabia and the United Arab Emirates couldn’t access international waters due to a key waterway, the Strait of Hormuz, being too dangerous to transit.
Roughly 20 per cent of the world’s oil is shipped through this waterway.
While Australia has been able to consistently secure fuel supplies during the crisis, fuel prices still soared.
The United States (US) and Iran are currently in negotiations to end the war, with peace talks underway in Switzerland.
Speaking on Sky News on Sunday, Albanese didn’t rule out a further extension of the excise cut, saying the government had delayed any decision regarding continued reductions until now due to awaiting details of the peace talks between Iran and the US.
“This is about providing certainty. Of course, we do live in a volatile world, so were there to be a massive global shock again. My government will always respond, but this is about providing some certainty going forward into the future,” Albanese said.
“We only had the peace deal between the United States and Iran announced in the last week, and that’s why, in the lead-up to the end of the financial year June, there was a need for us to delay a decision to this point.”
Albanese highlighted the Government’s efforts to shore up Australia’s fuel supplies during the crisis and criticised suggestions made by political rivals earlier in the year that Australia would need to impose fuel rationing.
“Prior to Easter, there were demands from the three right-wing parties to say that it was certain that there would be restrictions placed on petrol that was adding to the trauma out there that people were feeling – that uncertainty, that anxiousness,” Albanese said.
“We understood that we have cut the fuel excise by 32 cents, that’s made a difference to people’s hip pockets.”
Minister for Climate Change and Energy, Chris Bowen, said on June 13 that the Government’s plan had been for the excise to end.
“We’ve been very clear this was a temporary reduction in the excise. It was always intended to be temporary,” Bowen said.
“The Prime Minister and Treasurer have been very clear that we’ll always examine the latest information, the latest situation, but our intention has been for it to come off at the end of the month and that remains the plan.”
Extracted in full from: https://www.drive.com.au/news/fuel-prices-to-stay-a-bit-lower-for-a-bit-longer-as-australian-fuel-excise-support-extended/
