Businesses missed out on fuel tax relief

0

Regional areas around Australia could continue to benefit from less taxed fuel for several weeks. -AAP Picture

Businesses have largely missed out on fuel price relief from the halving fuel excise tax, with households benefiting more from the temporary cost-of-living measure.

This is a product of the design of the fuel tax, according to an explainer from the Parliamentary Budget Office.

The Morrison government halved the excise on fuel from March for six months in a bid to ease pressure on the cost of living, but the excise will return next week.

While the temporary tax relief has primarily benefited individual motorists, most businesses are already paying less gas tax through a fuel tax credit system that provides refunds to eligible businesses.

Australia is also among the OECD countries that tax oil the least, the report says.

It ranks 12th in road-related fuel taxes and ninth in taxes on other fuel uses.

The country’s weak tax environment can be partly explained by the lack of an explicit carbon tax component, according to the report, which some other countries have.

The halved excise tax on fuel is expected to be reinstated in just over a week, but prices are not expected to rise just yet.

Regional areas could continue to benefit from lower-taxed fuel for several weeks, with urban gas stations likely having to purchase fuel at a higher price sooner than regional stations due to higher turnover.

NRMA’s Peter Khoury said motorists were not expected to see an immediate increase, and that his motoring organization as well as the consumer watchdog would be watching the matter closely.

“It will take several days in capitals and possibly even longer – up to two weeks – in regional areas,” he said.

“This is because gas stations will already have an existing stock before going to restock with fuel at the higher rates.”

Treasurer Jim Chalmers said there would be more than 700 million liters of low-excise fuel in the system when excise duty is reintroduced, so the price is unlikely to rise immediately.

On Monday, the Australian Petroleum Institute reported that the national average price for unleaded petrol fell 0.9 cents per liter last week to a nine-month low of 163.5 cents per litre.

CommSec estimates that it costs the average family $228.90 per month to fill up the car, well below the record high of $297.50 per month in March.

Experts agree that the main driver of bowser prices is the world price of oil, which has been under pressure due to Russia’s war in Ukraine.

Bowser prices are only expected to fall when the world price starts to stabilize.

Australia supports a price cap on Russian oil exports, which Dr Chalmers said would help solve the problem.

Share.

Comments are closed.