Australia to wind back fuel excise cut
Sydney (21 June)
The Australian Government will halve its fuel excise cut on 1 July - and remove it on 2 August - to support motorists and businesses until Iran-related shipping disruptions ease.
“This is more temporary support that will help take the sting out of petrol prices and help Australians with the cost of living,” the Government said in a statement on 21 June.
The Australian Government cut the country’s 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 oil price increases linked to the US-Israeli war in Iran.
Brent crude futures prices rose from $72.87/barrel on 27 February – immediately before the Iran war began – to a peak of $114.44/barrel on 4 May. But Australia’s fuel excise cut has likely curbed transport inflation in recent months.
Retail petrol costs dropped below pre-Iran war levels in six of Australia’s eight territorial capitals over the week to 10 June – before the US and Iran announced an initial peace deal on 15 June – according to the Australian Competition & Consumer Commission (ACCC).
Australia’s annual consumer inflation rate reached 4.2% in April, down from 4.6% in March, largely because of an excise cut-driven drop in diesel and petrol prices, data from the Australian Bureau of Statistics (ABS) show.
Brent crude futures prices have declined over the last week. Futures traded at $80.59/barrel on 19 June, before markets closed for the weekend. But the Australian Government has warned that oil prices may not immediately fall to pre-Iran war levels.
“There is a great deal of uncertainty about how long it will take before normal [oil] trade resumes [following the signing of an initial US-Iran Peace Deal]. And when you have a disruption to trade, you have an increase in price,” Prime Minister Anthony Albanese said on 20 June.
“Yesterday, I met the global head of Shell … – Sir Andrew Mackenzie – … [and] they’re concerned, as is the world, about the consequences and how long it takes for the proper reopening [of the Strait], and the consequences for prices that will occur,” Albanese said two days earlier.
By Avinash Govind