Skip to main content

The federal government’s recent fuel excise cut has lowered petrol prices according to the Australian Competition and Consumer Commission (ACCC).

Amid the perceived positive effects at service stations across major capital cities, industry bodies such as the Federal Chamber of Automotive Industries (FCAI) and the Australian Automotive Dealer Association (AADA) are calling for more substantial vehicle tax reforms.

According to the FCAI, now’s the right time to reconsider  broad-based road user charge scheme “which would replace a range of outdated and inefficient charges” including  registration, fuel excise licence fees, luxury car tax and sales tax.

“We need this reform to move Australia’s road tax system from last century and ready it for the future of motoring. Australians want a future that can provide clarity, simplicity, fairness and value to their wallet. There is no better time than now to bring this future into reality,” FCAI chief executive Tony Webber said

In the same vein, the AADA want the government to look into structural reform on vehicle taxes.

“Dealers’ customers provide tens of billions in taxes annually to federal, state and territory governments. Halving the fuel tax for motorists for six months will relieve some pressure in the short term, but what is desperately needed is a wholesale review of the automotive taxation system in Australia,” AADA CEO James Voortman said.

Beginning March 29, fuel excise was slashed from 44.2 cents per litre to 22.1 cents per litre excise which resulted in “significant falls” in retail prices according to the ACCC.

The consumer watchdog claims that until April 5, 2022, average daily prices for unleaded petrol fell between 25 and 27 cents per litre in Sydney, Melbourne, and Brisbane, 31 cents in Adelaide, and 35 cents in Perth. Meanwhile, retail prices fell between 19 and 24 cents per litre in Canberra, Hobart, and Darwin.

“Over the next weeks, as petrol stations use up their stocks of fuel on which the higher excise had already been paid, we expect the reduced wholesale price to be passed through at the bowser everywhere,” ACCC Chair Gina Cass-Gottlieb said.

“Despite the various factors impacting the fuel price, our analysis indicates that clearly a major part of the reduction in excise has already been passed through in the major capital cities,” Ms. Cass-Gottlieb added.