The Opposition has proposed halving the fuel excise

Opposition Leader Angus Taylor has called on the Government to halve the fuel excise to lower petrol prices for Australians.

The price of petrol has increased significantly over the past month due to the U.S-Israel war with Iran, which has impacted global supply of oil.

So, what is the fuel excise?

Fuel excise

The fuel excise is effectively a tax on petrol. It has existed since 1901. Currently, consumers pay 52.6 cents per litre of petrol in tax for both petrol and diesel.

(Note: The fuel excise is technically paid by the manufacturers, but they ‘pass it on’ tothe customer.)

Many countries have an equivalent tax. For example, it’s £0.53 ($AU1) in the UK, and around 14 cents per litre in the U.S (20 Australian cents).

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In March 2022, the then-Coalition Government halved the fuel excise for six months as a cost-of-living measure.

At the time, the excise was 44.2 cents, so the discount lowered it to 22.1 cents.

Labor supported the decision when it was in Opposition.

After Labor won the 2022 election, Treasurer Jim Chalmers said it would be “too expensive” for the Government to continue the discount for more than the intended six months.

New call

On Friday, Opposition Leader Angus Taylor called on the Government to halve the fuel excise again.

“That will mean 26 cents a litre off at the bowser... We have proposed a fully-funded package that will not put pressure on inflation,” Taylor said.

When asked about Taylor’s proposal today, Prime Minister Anthony Albanese said: “My Government has always been strong on cost of living measures... We do so in a responsible way in the context of our budget considerations.”