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Rising fuel costs prompt calls for government to reduce excise - but would that help?

A man pumps petrol at a service station in Melbourne, Monday, Aug. 27, 2012. (AAP Image/Julian Smith) NO ARCHIVING

A man pumps petrol. Source: AAP

Global oil prices are skyrocketing amid the fighting in Ukraine, leading to record fuel prices in Australia. There are calls for the government to cut the fuel tax, just two weeks out from the federal budget.


The rising cost of fuel is leading to calls for the government to step in.

Global oil prices have skyrocketed, just two weeks out from a pre-election budget.

Prime Minister Scott Morrison says the situation in Ukraine is to blame.

State premiers are demanding a temporary cut to the fuel excise to help struggling consumers.

The excise raises about $20-billion a year for road and transport infrastructure.

The fuel excise is a flat tax levied by the Australian government on petrol and diesel bought at the bowser.

It's indexed to inflation.

Deloitte Access Economics partner Chris Richardson says it accounts for about one-fifth of the fuel price.

Prices are already more than $2.20 a litre and expected to rise to as much as $2.50.

Scott Morrison says any decisions on this will come when the federal budget is handed down on the 29th of March.

 

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