The Australian treasurer has warned that the petrol tax cut, which will save hard-up motorists hundreds of dollars at the Bowser, will not be extended.
Jim Chalmers said extending the temporary initiative is unlikely to be a priority in the upcoming budget and blamed the national debt.
The fuel tax will expire on September 28, with the Labor government repeatedly warning drivers that it would be ‘very difficult’ to extend it any further.
“This is actually a clash of fiscal reality and economic reality. To extend it for another six months, for example, would be another $3 billion,” said Dr. Chalmers.
Treasurer Jim Chalmers said extending the temporary initiative would probably not be a priority in the upcoming budget and blamed the national debt (pictured, a driver from Sydney)
The fuel tax expires on September 28, as the Labor government repeatedly warns drivers it would be ‘very difficult’ to extend it further (photo, Sydney traffic)
dr. Chalmers said the government had to weigh up the costs responsibly and that extending the fuel tax would cost “a lot of money” in the coming budget.
He described the budget as “heavy” under the weight of a trillion dollars in debt from the previous Morrison administration.
The bitter blow to motorists comes as households across the country continue to feel the pinch of the rising cost of living.
In June, the national average price for unleaded gasoline reached the second highest level in history, not far from the record price shortly before the federal budget.
On Wednesday, the average price for E10 fuel was $2.06 per liter and at some gas stations as much as $2.25 per liter.
Gasoline cost $1.51 a liter at the same time a year ago.
dr. Chalmers (pictured in June) said the government needed to weigh up costs responsibly and extending fuel taxes would cost ‘a lot of money’ in the coming budget
The Australian Institute for Petroleum said the national average for petrol rose by 6.4 cents to 211.9 cents per liter in the week ending June 26.
This was a fraction lower than the March peak, ahead of the federal budget that halved fuel taxes for six months and cut prices by 22 cents per liter.
A family that fills up two cars once a week will pay about $30 more per week, or $700 more over six months, when the tax is lifted.
Crude oil prices, which have been driven by a global recession, are said to have contributed to skyrocketing fuel costs, as well as Russia’s invasion of Ukraine.
Independent economist Chris Richardson told the Australian Financial Review that prices would continue to be affected by sanctions on Russian oil.
“The longer Russian oil is subject to some sort of sanction, the smaller its impact on prices, partly because other suppliers are doing things, and India and China are buying it and the price hits new levels,” he explained.
Prime Minister Anthony Albanese echoed the treasurer’s sentiments at a press conference held Wednesday in flood-ravaged Sydney’s west.
“The former government has implemented a time-limited change to petrol payments, which will end,” Mr Albanese said.
Before the election, both parties said they had no plans to increase that further in the future. And that’s a circumstance that we have to deal with. We cannot do everything we would like to do.
Prime Minister Anthony Albanese (pictured earlier this week) echoed the treasurer’s sentiments at a press conference in the flood-ravaged west of Sydney
A family that fills up two cars once a week will pay about $30 more per week, or $700 more in six months, when the tax is lifted (pictured, Melbourne fuel prices in March)
‘Because if we do nothing in the long run to improve the fiscal position of the budget, the consequences for households will simply continue. So we are faced with difficult decisions.”
dr. Chalmers warned Aussie motorists earlier this week to expect the temporary fuel cut will end amid growing public debt and economic challenges such as high inflation and falling real wages.
“(People) have to assume the petrol price cut is coming in September,” the treasurer told a Guardian Australia podcast.
“Obviously we take into account the circumstances as they evolve, the budget and the rest. But nothing substantial has changed to make me think we could continue that indefinitely, or even considerably longer than September.”
Inflation rose to 5.1 percent in the past 12 months in March, on the back of higher housing construction costs and fuel prices (photo, fuel prices at a Melbourne gas station in May)
dr. Chalmers has said there may be other cost-of-living measures in his October budget, but the fuel savings would likely end as planned (pictured, Melbourne rush hour)
To make matters worse, Aussie households crippled by rising costs of living and electricity prices can expect higher grocery bills from Aug.
The increase comes after supermarkets agreed to price increase requests from suppliers of processed and packaged goods who are facing their own increased costs.
Inflation rose to 5.1 percent in the previous 12 months in March, on the back of higher housing costs and fuel prices.
It is expected to rise again on July 27, following a projected 50-point increase in inflation this week.
dr. Chalmers has said there may be other cost-of-living measures in his October budget, but the fuel savings would likely end as planned.