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‘Brace yourself’: Why there’s no short term solution to petrol price pain

Australian motorists are being warned to brace themselves for soaring petrol prices as the Federal Government rules out taking any action to reduce costs.

Petrol prices across the country continue to rise after Russia’s invasion of Ukraine pushed crude oil prices to an eight-year high.

The Government is now facing calls to cut the fuel excise, which is taxed at 44¢ per litre, as prices creep up beyond $2.

The average price of unleaded petrol in Perth reached 208.9¢ per litre on Wednesday — an Australian record that obliterates the mark set just a fortnight ago by more than 10¢.

South Australian senator Rex Patrick is piling pressure on the Treasurer to halve the excise in the coming March 29 Budget.

Petrol Prices
Camera IconPetrol prices are soaring across the nation. Credit: News Corp Australia, Dean Martin

Meanwhile, Labor leader Anthony Albanese left the door open to a cut, should he become prime minister in two months time.

But one expert said a cut to the fuel excise would make little difference.

“You can‘t adjust the tax based on what oil prices are doing because they are so volatile,” NRMA’s Peter Khoury said.

“It seems like a natural progression but it’s not.”

Instead, he said Australians needed to brace themselves for further price increases: “There is no short term solution”.

In the 2021-22 financial year alone, Australians will pay more than $11 billion in net fuel excise – with most of that to be reinvested into transport projects, such as building new roads.

Petrol Prices Today Pic
Camera IconThe government has ruled out cutting the tax. Justin Lloyd. Credit: News Corp Australia

The Australian Automobile Association estimates that equates to a $1188 bill for a typical household.

In 2001, former prime minister John Howard froze the excise after soaring oil prices sent the cost of fuel up towards $1 per litre.

But Energy Minister Angus Taylor has ruled out a policy repeat.

“We have no plans to do that,” he said.

Mr Taylor argued the excise was required so the government could keep “road building”.

“We see the pain people are feeling at the pump,” he added.

“The excise is used to fund road spending … And we want to keep that road building going on.

“As I drive around, during the floods, I see how much more work has to go into our roads in the coming years and that has to be paid for.”

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