Dutton signals Coalition support for temporary fuel excise cut as cost of living soars

With many Aussie motorists paying more than $2 a litre for petrol, Opposition Leader Peter Dutton has indicated the Coalition would back a cut to the fuel excise.

Opposition Leader Peter Dutton has opened the door to Coalition support for a temporary cut to the fuel excise as Australian motorists face soaring prices at the bowser.

The fuel excise is a tax levied by the federal government on petrol and diesel bought at the bowser. Motorists currently pay 48.8 cents in excise for every litre of fuel they purchase.

Speaking in an interview on Sky News on Sunday, the opposition leader was asked if the Coalition would consider supporting moves to cut the fuel excise, amid warnings that record petrol prices could rise further as the Israel-Hamas war escalated.

“There can be temporary relief through a reduction,” Mr Dutton said in a move that contradicts the Coalition’s commitment towards budget repair.

Opposition Leader Peter Dutton has indicated a temporary cut to the fuel excise would have the Coalition’s backing. Picture: NCA NewsWire / Martin Ollman

While conceding that the measure was costly, the opposition leader stated there are “periods where [a cut to the excise] is effective”.

Unleaded petrol prices have now hovered around $2 per litre for weeks, according to analysis by the Australian Institute of Petroleum.

Fresh inflation figures released on Wednesday, which exceeded economists expectations, showed fuel prices had risen 7.2 per cent in the September quarter.

Brent crude prices soared above $US90 a barrel on Sunday as supply cuts from Saudi Arabia and Russia and the outbreak of war between Israel and Hamas pushed prices higher.

Australian motorists have now been paying upwards of $2 a litre for unleaded petrol. Picture: NCA NewsWire / John Gass

The government has come under increasing pressure to consider a cut to the fuel excise, but has ruled out temporary relief thus far.

“We’ll contemplate what measures are necessary in our economy, consistent with our really strict approach to fiscal discipline, but it’s not something that we’re doing,” Treasurer Jim Chalmers told reporters on Wednesday.

Last September, the Albanese government allowed a 22c cut to the petrol excise to expire, arguing a further extension would cost the federal budget as much as $3 billion in just six months.

A temporary six-month reduction in the excise was announced in the 2022 March budget by the former Morrison government, as part of a pre-election cost of living package.

Originally published as Dutton signals Coalition support for temporary fuel excise cut as cost of living soars