In May, the tax was halved temporarily, from 44 cents a litre to 22 cents a litre, by the former government to ease soaring fuel costs caused by the conflict in Ukraine.
Speaking to reporters on Tuesday, Treasurer Jim Chalmers dismissed calls to extend the fuel tax reduction given the Government was in $1 trillion in debt.
“We've made it clear for some time now that it would be too expensive to continue that fuel excise relief indefinitely,” Chalmers said.
He said it would cost $3 billion to extend the tax cut by six months.
Fueltrac cofounder Geoff Trotter also said some retailers had not been passing the fuel excise tax cut on to customers, especially in the regions.
He also said diesel prices had remained needlessly high.
Since a peak in mid-June, global oil prices had been falling, which was translating into lower prices in Sydney, Melbourne, Brisbane, Adelaide and Perth where there was still competition.
Trotter said competition had virtually disappeared outside the capital cities.
He said diesel was particularly concerning because it flowed directly into the consumer price index (CPI).
“Because not only is it at the pump, but it also flows through to all the distribution costs for food and goods and so on,” he said.
Trotter said if the Government chose to extend the fuel excise tax, it would mostly continue to benefit the retailers that were failing to pass on the tax reductions and falling wholesale prices.
Keeping your petrol costs down
Joel Gibson from One Big Switch offered a couple of tips for motorists keen to keep their costs down:
Explore discount schemes via supermarkets, motoring clubs and gift cards.