Drive quickly, but safely, to the petrol station now

Pain at the pump is becoming more bearable.

Pain at the pump is becoming more bearable.

Petrol prices are the lowest they have been since Russia invaded Ukraine and economists suggest when the fuel excise lifts in a few weeks the sting won't be as bad as first thought. 

The national average petrol price fell to 173.6c a litre on Sunday - a price not seen since Easter. The federal government is poised to stop subsidising the cost of petrol by 22c a litre on September 28 - a measure taken by the previous Morrison government to help drivers with the cost of fuel.

Economist Chris Richardson told The Oz the natural fall in global oil prices would help reduce the price of petrol when the government assistance ends next month, but it was too early to say whether we can still expect to pay under $2 per litre at that time. 

“Global oil prices are back at or below where they were when Russia invaded Ukraine - now it takes a bit of time to flow through to the pump but in a simple world we can expect the recent fall in prices to continue,” he said. “This will make it a bit easier to navigate the end of the fuel excise”. 

Richardson advised against waiting for petrol to drop even further.

“Australians famously leave everything until the last moment - such as Christmas shopping - so let’s just say don’t put off filling up until the day before the tax comes back because the queues will be enormous.”

NRMA spokesman Peter Khoury advised drivers - especially those living in Sydney and enjoying low prices of 163.1c per litre - to fill up now.

"Due to the volatility of the market we have no idea of knowing what the prices will be at the end of this week let alone the middle of next month," he said.

"The number one factor that determines petrol prices in Australia are oil prices and as we know that in June and throughout 2022 they consistently broke record highs. We are now starting to see pretty considerable falls but the only concern we have is the volatility of those prices."

Khoury said prices were still falling in most of the capital cities, but not as drastically in places like Canberra, Hobart or Darwin - which consistently battle it out for the title of most expensive city to fill up your car's tank. 

Khalil said drivers will notice a shift when the 22c tax is reintroduced but with oil prices significantly lower than when the excise was reintroduced it may not sting as much.

"If you’re in Sydney fill up now," he said. 

The Australian consumer watchdog's (The Australian Competition and Consumer Commission) official advice to motorists living in Brisbane, Adelaide, Sydney and Melbourne is to delay buying petrol if possible, and wait for the drop.

Those living in Perth are advised to fill up their tanks now as prices are likely to have hit their bottom. 

Anthony Albanese has previously ruled out extending the 50% fuel excise cut beyond September 28 due to the cost to the budget bottom line. It would cost the government (read: you, the taxpayer) $3 billion if extended by another six months.

Treasurer Jim Chalmers has called on fuel companies and service stations to “do the right thing by Australians” and pass on savings from falling oil prices.

“It’s encouraging to see prices starting to drop in many places across the country recently, and credit to the operators who are doing the right thing by their customers,” Dr Chalmers told The Australian.

“I think people get really filthy when the price goes up internationally and they see it get passed on quick smart, but when the price goes down internationally, sometimes it takes too long for those savings to be passed on to consumers.

“I urge servos and fuel companies to do the right thing by Australians, and the ACCC are always watching.”

After the cut in fuel excise came into effect on March 30, 2022, ACCC monitoring found significant falls in retail fuel prices in all capital cities and the vast majority of regional locations.

Chief Economist at Commsec, Craig James, said pump prices had fallen for 49 straight days in Sydney, down from 218.7 cents per litre to 163.1 c/l.

"That fall of almost 56 cents represents savings of around $30-35 to fill up a vehicle from near empty," he said. "In Brisbane, prices have also fallen for 49 days, down 59 cents a litre. The $64 question is when will the petrol cycle end given that pump prices are only modestly above the wholesale price?"

CommSec estimates that it is costing the average family $243.04 a month to fill up the car with petrol – well below the recent record high of $297.50 a month in March.

But despite recent falls in pump prices, it still costs around $21 a month more to fill up the car compared with the start of the year – over seven months ago.

Last month, data from CompareTheMarket found that Australians were spending nearly three-quarters more on petrol each month than they were less than a year ago.

Additional reporting Rosie Lewis.