Australia lifts fuel excise rate by A$0.16/litre
Sydney (3 August)
The Australian Government has lifted its fuel excise rate from A$0.37/litre to A$0.53/litre, fully unwinding an excise rate cut introduced in early April to limit Iran war-related oil price increases.
The Government cut its fuel excise rate by A$0.32/litre, from A$0.53/litre to A$0.21/litre, for three months in early April because of war-related price shocks. It then lifted the excise rate to A$0.37/litre on 1 July, as part of a staged unwinding of the cut.
“We planned to taper [the fuel excise cut off] at the start of [July] deliberately so we could provide a bit more cost‑of‑living help, so we could smooth out the transition from the full 32 cents to half of that throughout the course of July,” Australian Treasurer Jim Chalmers told reporters on 29 July.
“It was never the Government’s intention for [the excise cut] to be permanent,” Chalmers added.
Australia’s fuel excise rate increase could push up retail diesel and petrol prices. Fuel importers and refiners passed on the Government’s 1 July excise hike to retailers within one week. Retailers then passed on the hike to consumers over one month.
Retail petrol and diesel prices in Australia’s five largest cities averaged A$1.94/litre and A$2.33/litre, respectively, on 29 July, up from A$1.52/litre and A$1.74/litre on 30 June, data from the Australian Competition & Consumer Commission (ACCC) show.
Brent crude futures prices increased from $72.95/barrel (A$103.97/barrel) to $84.09/barrel over the same period, data from Trading Economics show. Brent crude futures last traded at $87.93/barrel on 31 July, before markets closed for the weekend.
Australian fuel prices have increased in recent weeks, but its fuel supply outlook has remained moderately stable.
The country has 43 days’ worth of petrol reserves, 39 days’ worth of diesel reserves, and 34 days’ worth of jet fuel reserves, Energy Minister Chris Bowen said on 1 August. Its fuel reserves are up from 43 days’ worth of petrol, 38 days’ worth of diesel, and 32 days’ worth of jet fuel a week ago.
“No [fuel] orders to Australia have been cancelled, and … orders continue to be locked in through September and into October,” Bowen said. “Australia’s fuel security [situation] … continues to be in good shape, and Australians can continue to buy the fuel that they need,” Bowen added.
By Avinash Govind