Fuel prices fall as Australian servos fast-track excise cuts

Petrol prices in Australia’s biggest cities began falling on Wednesday as retailers moved unexpectedly early to pass on the federal government’s 26¢-a-litre excise cut in part or in full, even before most sites have depleted existing stocks and bought new fuel at cheaper prices.

In Melbourne, the average price of unleaded fell 16¢ a litre from nearly $2.60 a litre on Tuesday to $2.43 a litre by Wednesday morning, new figures show. Service stations across Sydney had cut average prices by about 13¢ to $2.44 a litre.

Steeper cuts were recorded in other parts of the country: prices fell 15¢ in Brisbane and 18¢ in Hobart on average.

Adelaide led the nation with the sharpest fall, cutting prices by 25¢ to $2.34 a litre, while Perth had the smallest decline of 7¢ a litre to a citywide average of $2.44.

The Albanese government this week announced a temporary halving of the fuel excise – a flat tax that adds 52.6¢ a litre to the cost of petrol and diesel – to help ease cost-of-living pressures on households caused by the war in the Middle East. In the month since the first US and Israeli attacks on Iran, attacks on oil fields and Iran’s de-facto blockade of the Strait of Hormuz have paralysed up to one-fifth of the world’s supply of crude oil – the natural resource that is refined into petrol, diesel and aviation fuel – and sent prices soaring to record levels across Australia.

While the 50 per cent excise cut kicked in on Wednesday, Treasurer Jim Chalmers earlier this week said that the saving would take up to a fortnight to fully work its way through the fuel network.

However, some retailers have moved by passing on higher-taxed stock at the discounted prices, choosing to take a short-term hit to their bottom line that could be offset once the excise returned to normal, said fuel company sources who asked not to be named.

Diesel prices across Australia have increased more sharply than petrol, a major concern for many critically important industries that depend on the fuel, such as transport, agriculture and mining.

The average price of diesel also fell significantly by Wednesday morning, the NRMA figures showed. The average price in Sydney is down more than 11¢ a litre, and more than 15¢ in Melbourne.

The new capital-city price figures compiled by the National Roads and Motorists Association made clear that some operators had opted to pass on excise cuts immediately.

“Based on these prices, people will start to feel relief today,” NRMA spokesman Peter Khoury said.

However, the figures are citywide averages only, meaning lower fuel prices will not yet be reflected at every service station, Khoury added. “If you pull up at your local servo, and you haven’t seen a cut yet, they aren’t doing anything wrong,” he said. “They are waiting until they stock their tanks at the cheaper rates – and that could take days or weeks, depending on where the servo is located and how many customers they have.”

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