Queensland’s petrol prices expected to soar as fuel excise comes to an end

The mix of the end of the excise cut and the height of the fuel cycle will soon see massive hikes at the bowser.

2 min read

September 13, 2022 - 12:00AM

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Fuel prices will skyrocket above $2 per litre as the reduced fuel excise comes to an end during school holidays, in a nightmare for motorists.

In a matter of weeks, prices for unleaded petrol are expected to hike more than 50c per litre, from the Brisbane average of just $1.58.

Prices for diesel are also expected to increase towards the end of the month.

Earlier this year, in the lead-up to the federal election, the national fuel excise was cut in half, giving service stations a 22.1 cent discount on unleaded petrol for six months to ease cost-of-living pain.

The mix of the end of the excise cut and the height of the fuel cycle will add further pain to already tight Queenslander budgets.

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Brisbane’s average price of unleaded petrol is forecast to hit $2.13 per litre, with an average diesel cost of $2.05 per litre. Prices aren’t expected to drop below $2 any time soon.

Fuel analyst Geoff Trotter, from Fueltrac, said he expected the bowser pain to start before the excise, as soon as within a week.

“What I expect will happen is petrol companies will soon increase their prices by about 30c a litre in a week or so. My estimate is that they’ll increase to about $1.88,” he said.

“Then at the end of the month, the federal fuel excise cut comes to an end and they’ll add the extra 22c per litre.”

Once the full excise of 44.2 cents is reinstated after September 29, theoretically it should take a week or two for the price increase to flow through to the bowser, but Mr Trotter said it could happen even sooner.

“I expect they’ll (petrol companies) jack the prices up right away,” he said.

Fueltrac's Geoff Trotter.

Meanwhile, the ongoing price disparity between diesel and petrol costs can be linked to the difference in wholesale prices.

“The international price for diesel is much higher than petrol because diesel is also known as heating oil, and currently Europe is building stocks of heating oil for the northern winter,” he said.

“This year, there won’t be any supplies coming from Russia so there’ll be huge demand for heating oil, or diesel, in Europe.”

Meanwhile, RACQ spokesman Tristan Vorias said the higher costs of diesel were linked to higher global demand, amid the drop in supply due to sanctions against Russian exports.

“Overseas factors, such as the war in Ukraine, are creating an extremely volatile market, making future unleaded and diesel prices very difficult to predict,” he said.

Mr Vorias said the cut to the fuel excise was always a “short-term solution” but the government shouldn’t look to extend it any further.

“Fuel excise revenue offsets the cost of vital road infrastructure and safety upgrades. Queensland is currently on track to record its highest road toll in more than a decade, and we need 100 per cent of fuel excise reinvested back in our road infrastructure. Now is not the time to be cutting investment in road safety and infrastructure,” he said.