Treasurer Josh Frydenberg urged to cut fuel excise in budget amid soaring petrol prices - ABC News

SA Premier Steven Marshall has written to the federal government asking it to reduce the fuel excise in the next budget, amid record petrol prices.

Key points:

• The fuel excise is currently set at 44.2 cents per litre
• The SA government has written to its federal Liberal counterpart asking for that to be reduced
• Prime Minister Scott Morrison said the federal government was working with other nations to release reserves and cut prices

Prices of $2 per litre have become commonplace across the country in recent weeks, and have even exceeded an eye-watering $3 per litre in remote Arnhem Land.

The fuel excise — a flat tax levied on petrol and diesel bought at the bowser — is currently set at 44.2 cents per litre.

Mr Marshall, who is facing an election in less than a week, said he had written to Treasurer Josh Frydenberg asking him to cut the tax.

"We've asked Josh Frydenberg in the upcoming budget to consider providing some relief with regards to the excise," Mr Marshall said this morning.

He said while the excise was a major revenue raiser for the federal government, motorists "are really feeling it in their hip pocket at the moment".

"We also know that with fuel prices so high this is going to have a massive flow-on effect for cost of living, for households, but also for the productivity of the nation," he said.

"It's going to hit all of our truckies moving important goods right around the country at the moment, it's a very difficult time.

"Temporary relief would be very, very much welcomed."

Asked if he would consider reducing the excise, Prime Minister Scott Morrison would not be drawn on the federal government's precise plans.

But he added that the excise was unrelated to the huge variation in petrol prices across Australia.

"The answer is, the budget's at the end of this month," Mr Morrison told Channel Nine this morning.

"But my point is that excise, where it has sat, is not going to change what the fluctuations are in price.

"I mean, we've seen it going from, you know, $1.70 to $2.20. That's gone above the total excise you even pay on fuel per litre."

Petrol prices above $2 per litre have become commonplace in recent weeks.(ABC News: Jassica Moran)

Exorbitant petrol costs have been attributed to several factors, with Russia's invasion of Ukraine foremost among them.

Russia is a major oil producer, and its attack on its neighbour has significantly increased market volatility.

While crude oil remains below previous record prices, the Australian dollar is much weaker than it was the last time oil was this expensive.

"I think Australians know that what's happening with petrol prices at the moment is being caused by what's happening with the war in Europe," Mr Morrison said.

"We're working with other countries around the world at the moment in terms of releasing fuel reserves to try and alleviate the pressure on fuel prices."

Speaking in Sydney, NSW Premier Dominic Perrottet would not comment on whether he would follow his South Australian counterpart's lead but said the rising tax "penalises people right across our state and across the country".

"Cost of living and family budgets [are] a real issue right now and will continue to be so, particularly as we move into a more inflationary environment," he said.

"We should be doing everything we can to make sure the focus isn't on our own budget but on family budgets across the state.

"I'd welcome any move by the Commonwealth to reduce excise which reduces the cost to families at this difficult time."

SA government and opposition unveil rival fuel relief schemes

Mr Marshall made his pitch for lower prices six days out from the March 19 state election, but Labor also unveiled a policy to ease the fuel burden.

Opposition Leader Peter Malinauskas said a Labor government would double the government's Cost of Living Concession next financial year.

He said Labor would invest $37.7 million to boost the concession, for eligible individuals, to up to $434.

"Petrol prices in Adelaide have hit $2.20 a litre. This is unprecedented in our lifetimes and we know that it's having a particularly draconian impact on South Australians doing it tough," he said.

"For one year only, in the next financial year, a Labor government I lead [would] double the Cost of Living Concession payment for those people who are eligible — particularly pensioners, particularly seniors, but also those who are on fixed low incomes.

"If you're a pensioner on a fixed or low income, your ability to be able to fill up your car with petrol has now been dramatically impinged upon."

Russia is a major oil producer and its invasion of Ukraine has driven up fuel prices.(Reuters: Sergei Karpukhia)

Mr Malinauskas blamed high prices on "Russian aggression" and conceded his policy would only lead to "modest" relief, given that state governments can only do so much to ease the burden.

"The state government can make a little bit of a positive difference," he said.

"I note that Steven Marshall's response to this cost of living spike, this massive impost on people doing it particularly tough, is to write a letter to Josh Frydenberg. Well I think that doesn't cut it."

But Mr Marshall unveiled another plank of his fuel policy, saying he would make the government's real-time fuel pricing scheme permanently available if he is returned to office.

The scheme includes an app that compares prices at petrol stations across the state, and extending it would cost $1 million over the next four years, the government said.

The scheme was launched on a trial basis early last year, and includes penalties of up to $10,000 for non-compliant service stations.

"At the moment, when you're driving around you see a massive variation in fuel prices, anywhere from $2.21 right down to $1.71," Mr Marshall said.

"We want to make sure that motorists have that data at their fingertips so that they can get the best prices.

"We have definitely been able to lower the price that people are paying by giving them the information to shop around."

Mr Malinauskas hit back, saying the "real-time fuel pricing app, at the moment, isn't doing much".

"What's informing the petrol price being at $2.20 a litre isn't a lack of competition in the market place — it is a whole range of external forces that are global in nature," he said.

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2022-03-13 02:36:43Z
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