Petrol excise changes being considered for March budget

Petrol excise changes are being considered as part of the Federal budget to be handed down in just over a fortnight, as the Morrison Government comes under pressure over skyrocketing prices at the bowser.

Petrol excise changes are being considered as part of the Federal budget to be handed down in just over a fortnight, as the Morrison Government comes under pressure over skyrocketing prices at the bowser.

Managing expectations, Prime Minister Scott Morrison would not confirm if a cut or freeze to petrol excise would happen, warning the Russian invasion of Ukraine would continue driving prices up regardless.

But Assistant Treasurer Michael Sukkar the budget was taking into account the cost of living pressures being felt, as he warned interest rates were also all but certain to rise in the second half of the year.

Prime Minister Scott Morrison. Picture: NCA NewsWire / Flavio Brancaleone

The Howard Government froze the petrol excise indexation in 2001 at 38c a litre, coming under pressure from bringing in the GST and losing a by-election in the Brisbane seat of Ryan, before it was brought back by the Abbott Government in 2014.

It is now up to 44.2 cents, which means motorists are paying about $660 in petrol excise each per year based on ABS statistics on Australians driving about 14,000 kilometres a year.

Mr Morrison said the prices were being caused by the war in Europe, with Russia being one of the top three oil producers in the world.

Asked if a petrol excise freeze or cut was on the card, Mr Morrison pointed to the March 29 budget.

“That excise, where it has sat, is not going to change what the fluctuations are in price, that is going to mean many times over any change you made in excise,” he told Channel 9.

“We‘ve seen it going from, you know, $1.70s to $2.20. That’s gone above the total excise you even pay on fuel per litre. So what is driving fuel prices are things well beyond the shores of Australia.

“We‘re working with other countries around the world at the moment in terms of releasing fuel reserves to try and alleviate the pressure on fuel prices.”

Petrol prices have risen significantly to more than $2 a litre, well above record highs of more than $1.70 a litre just months ago. Picture: NCA NewsWire / Gaye Gerard

Assistant Treasurer Michael Sukkar said he would not foreshadow what “may or may not” be in the budget, but indicated there would be cost of living relief.

“There is no doubt that the budget will seek to build a recovery, ensure that we keep our foot on the economic accelerator, but also take into account that households are feeling the pressures of cost of living,” Mr Sukkar said.

Senior Labor frontbencher Tanya Plibersek said people had been feeling the impact of petrol price rises and slow wages growth well before Russia’s invasion of Ukraine.

“This is a government which presided over eight years of flatlining wages and since then we’ve seen everything go up but people’s wages,” Ms Plibersek said.

“The cost of petrol went through the roof, the cost of housing, the cost of groceries, all through the roof.”