Drivers warned about key dates as government confirms fuel discount's end

Treasurer Jim Chalmers has confirmed the fuel excise discount will end on Sunday 2 August, ending weeks of uncertainty over whether the discount would be extended for a second time.

"It was never the government's intention for [the discount] to be permanent," Chalmers said on Wednesday.

The initial discount of 32c per litre ended in June, after which the government extended the fuel excise cut at a reduced rate of 16c per litre.

"We began to taper that off at the start of the month, deliberately, so that we could provide a bit more cost of living help," Chalmers said.

While the NRMA does expect a modest rise in petrol prices from Monday, the roadside assistance and travel organisation doesn't expect costs to skyrocket.

"Our message to the public is: We know fuel prices are going to go up on Monday and beyond. We don't know by how much," NRMA spokesperson Peter Khoury told SBS News.

"We would expect average prices to go up a few cents per litre ... but it really depends on the service station."

Companies showing 'restraint'

The announcement ended weeks of uncertainty over whether the government would extend the fuel excise discount after Iran resumed its blockade of the Strait of Hormuz, sending global oil markets into shock for the second time since the US-Israeli attacks on the Islamic Republic in February.

Khoury said global oil markets were already responding to news on Monday that both sides had halted bombing, with benchmark unleaded prices dropping.

If the relative calm continues, Khoury said it will "definitely negate the increases we're going to get from the tax being reintroduced".

"We've seen a lot of restraint from the oil companies in the past few weeks," he said, adding that if global oil prices continued to fall it would "cushion the blow" of upcoming price rises in Australia.

By how much will prices go up?

Khoury said that price rises caused by the end of the fuel excise discount wouldn't happen overnight.

"It will be gradual, it won't be immediate," he said.

"Not every service station is going to put their price up by 17 cents a litre. In fact, almost none will. So please don't go out and panic buy."

Khoury told SBS News that, by the time the discount expires, it's likely the increase will be closer to 17 cents rather than the extended excise reduction rate of 16 cents.

"We think it's going to be another cent because of the inflation adjustment, which also just happens to land on the same day [Monday] they do that twice a year."

Just how much cost will be passed on to the consumer depends on individual service stations, Khoury added.

"We don't want people to panic because some service stations will go up on Monday and others won't; it really depends on when they sell their stock."

In any case, the fuel excise discount is being wound up against the backdrop of retail prices that are already steadily rising.

"The national average for unleaded is about $1.93, and we're expecting that to continue to increase based on the increases we've seen for wholesale prices," Khoury said.

That's a 13-cent increase from the $1.80 per litre calculated by the Australian Consumer and Competition Commission as the average petrol price in major cities on 22 July.

As of 21 July, Australia has 42 days of fuel reserves, with an expected 3.1 billion litres of crude, diesel, jet fuel, and petrol scheduled to arrive over the next four weeks, according to the federal government.

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