Australian fuel price relief to end as Treasurer delivers final nail

The cut to the fuel excise – which currently reduces fuel prices by 16 cents per litre – will end as planned this Sunday 2 August, Treasurer Jim Chalmers has confirmed.

"That fuel excise relief will end midnight on Sunday, and that's because it has played a really important role helping to take some of the sting out of these cost of living pressures," Chalmers said.

"But as I've made clear, it was never the government's intention for that to be permanent."

There had been suggestions early this week that the cut to the fuel excise tax would receive a last-minute extension, as it did last month, however Chalmers' comments appear to dash this hope.

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The excise typically adds 52.6 cents to every litre of fuel sold, but as petrol and diesel prices soared in March due to the war in the Middle East, the Federal Government reduced the tax by 32 cents for what was expected to be three months. 

As conflict continued, the Government partially extended the cut into July with a lower reduction of 16 cents per litre. The discount is also partially funded by state and territory governments, which forfeit their GST revenue.

War in the Middle East, which began in late February, has resulted in massive disruption to global oil supply and increased fuel prices around the world.

Ships carrying oil produced in Persian Gulf states such as Saudi Arabia and the United Arab Emirates couldn't access international waters due to a key waterway, the Strait of Hormuz, being too dangerous to transit.