Fuel excise cut expiring: How to save on fuel amid petrol cost rise

The price of fuel is set to jump as a major tax break is rolled back. But there are things you can do to ease the pain at the pump.

More pain is on the way for motorists this week as the federal Labor government winds back the former Liberal government’s cut to the fuel excise on Wednesday night.

The fuel excise is a 46 cent per litre sales tax levied by the federal government on all petrol and diesel sold at the pump. And it delivers big dollars.

In the March budget it was estimated Australian motorists would pay more than $13.9 billion this financial year and more than $62 billion over four years.

The Morrison government cut it by 22 cents back in the March budget to help ease cost of living pressures.

Federal Treasurer Jim Chalmers announced the Labor government would not extend the fuel excise cut beyond Wednesday night.

Labor’s federal treasurer, Jim Chalmers, said last week the removal of the fuel excise discount was one of many difficult decisions the government was making in the coming October budget.

“We are under no illusions that this will be difficult for people, it’s a difficult decision for us to take as well, but we put a premium on responsible budget management,” said Dr Chalmers.

Currently the national average price for petrol is about $1.63 a litre, which is about 50 cents less than the high of $2.12 in late March when the excise cut was announced.

Prices are expected to bounce when the excise returns at just before midnight on the 28th, but the government believes it shouldn’t shoot up overnight as fuel has been bought at lower prices in advance by the petrol stations.

There is no guarantee, though, as the price of fuel is set by the market and the government or Australian Competition and Consumer Commission have little control over the average price of petrol or diesel.

There is more pain at the pump for Aussie motorists.

Sarah Megginson, money expert at comparison website Finder, said the fluctuating fuel prices are going to put a lot of financial strain on the lives of Australians and it’s only set to get worse, but she has some tips for how to soften the blow of high petrol prices.

“Many Australians are dreading filling up at the pump, and with the fuel excise set to end in a week, now is the time to grab cheaper fuel while it’s still available,” said Ms Megginson.

She recommends planning when to fill up and find the best price in your area if you can.

Several state governments, such as NSW and WA, have apps that show the best priced fuel locally.

If your state government doesn’t provide a helpful app then there are plenty of independent versions such as Fuel Price Australia.

Sarah Megginson, money expert at Finder.

Choosing the right day can also save you big, said Megginson.

“Tuesdays mornings are often cheapest. I filled up my tank last Tuesday morning for 151.9 cents per litre, and by Tuesday evening it was 195.9 cents per litre. I bought 58L of fuel, a difference of $25.52,” she said.

Lastly, Megginson suggests that if you have to pay for fuel try to make the most of it and sign up for a rewards program that gives you airline points or cashback.

BP Rewards, Flybuys or Everyday Rewards all allow you to redeem points for cash off your fuel spend.

Driver’s should also make sure they have the right tyre pressure as flat tyres can offer more resistance and increase fuel use.

Crack a window as aircon ups your fuel use considerably, but if you are travelling over 80km/h the increased wind resistance makes it more efficient to have the aircon pumping.

Ditch any unnecessary items in your boot to lower your car’s weight and rethink if you really need those roof racks.

Go easy on the accelerator and brake too if you want your tank of fuel to last longer.

If you are in the market for a new car, consider a hybrid that can cut your fuel use in half.

Originally published as Fuel excise cut expiring: How to save on fuel amid petrol cost rise