Push to cut fuel excise would save motorists potentially $300 a year

Bringing back the petrol tax cut should be considered as prices at the bowser hit new heights, MPs are calling for while hip pocket pain continues to grow.

Bringing back the petrol tax cut should be considered as prices at the bowser hit new heights, MPs are calling for while hip pocket pain continues to grow.

Halving the petrol excise again could save the average motorist about $5.50 a week on their fuel bills.

While some MPs are calling for the excise to be cut again or at least frozen, Treasurer Jim Chalmers has indicated it is not currently being considered as the billions of dollars in cost-of-living relief from the budget was still flowing.

It has been 12 months since the Morrison-era tax cut ended, which saw the excise of petrol jump back up to 44.2c/litre from 22.1c, but in that time prices have risen from an average 184.9c/litre to a new record high of 237.9c/litre.

Petrol prices in Brisbane have hit record highs prompting calls for the petrol excise to be reviewed. Picture: NCA NewsWire / Gaye Gerard

While the excise was set at 44.2c/litre when it was first cut, through indexation it has already risen to 48.8c/litre.

With the average motorist using 1232.1 litres of fuel a year, based on analysis of ABS Survey of Motor Vehicle Use data, halving the fuel excise would save someone about $300 over a year or $5.50 a week.

Petrie MP Luke Howarth said people would welcome the excise being cut again and that it should not have been increased back to its full amount in the first place.

“Right now there’s a full blown cost-of-living crisis and the government doesn’t have a solution,” he said.

“They had the opportunity to keep (the excise cut) and they didn’t.”

Bowman MP Henry Pike said at the least the twice-yearly indexation of the fuel excise should be frozen.

“I would really encourage the government to think about some sort of freeze at least until we get through this inflationary cycle and see interest rates coming down again,” he said.

“Let’s freeze it in the first instance and have a broader look into how we want to use these charges and what the purpose in collecting it is.”

LNP Petrie MP Luke Howarth. Picture: Matthew Poon

Treasurer Jim Chalmers said it was not a measure the Federal Government was “currently contemplating” as there were better ways of addressing cost-of-living pressures.

“We are literally right now rolling out billions of dollars in cost-of-living support and we’re doing that in a way that takes some of the edge off inflation rather than adding to it,” he said.

“For example electricity prices went up 4.7 per cent, but without what we’re doing with our energy price relief plan, they would have gone up almost 20 per cent.”

Prime Minister Anthony Albanese said the government was addressing cost of living in a way which would not add to inflation.

“Whether it’s cheaper medicines, cheaper childcare that began on September 1, whether it be the additional assistance for over five million Australians who benefited from an increase in (welfare) payments last week, whether it be the tripling of the bulk billing incentive for Medicare,” he said.

Originally published as Push to cut fuel excise would save motorists potentially $300 a year