Sydney motorists are facing rising fuel prices following the partial reversal of a federal government excise discount, with further increases anticipated in the coming weeks. The temporary 32 cents per litre fuel excise reduction, initially introduced amid the Iran conflict to help curb soaring fuel costs, was cut in half to 16 cents on Wednesday. The remaining discount is scheduled to be fully removed on August 3.
By early Wednesday evening, the wholesale price of petrol shipped from Silverwater had increased by nearly 16 cents per litre. However, retail prices for regular unleaded and E10 fuel in Sydney showed only a slight uptick, reaching an average of 159.4 cents per litre. According to Peter Khoury, a spokesperson for the NRMA, this initial retail price increase was relatively moderate, allowing drivers to continue accessing some of the more affordable fuel options in the city.
“The average price in Sydney rose by two cents per litre overnight, with a similar increase of three cents in Melbourne,” Khoury noted. He added that many service stations across Sydney still offered prices below $1.50 per litre, providing motorists with reasonably priced fuel despite the hike.
Khoury explained that the price changes would appear gradually rather than immediately, as retailers first exhaust current supplies purchased under the previous pricing before stocking up at the new, higher wholesale rates. This process could take different amounts of time depending on location; urban service stations might adjust prices sooner, while rural or regional outlets, which tend to sell fuel more slowly, might take up to two weeks to reflect the new costs at the pump.
The excise rollback removal contributes 16 cents per litre to the price, but Khoury also indicated that wholesale petrol costs were expected to rise slightly more due to recent fluctuations in global oil markets. The NRMA has stated that it will closely monitor pricing to ensure fuel retailers do not exploit the excise changes to impose excessive markups.
Overall, while the immediate effect on retail petrol prices has been limited, motorists should anticipate a steady increase in fuel costs as the fuel excise discount phases out completely and wholesale prices respond to broader market trends.