Treasurer rules out any relief from petrol price pain

Andrew Brown, Jacob Shteyman and Poppy Johnston | September 28, 2023

Motorists should not expect intervention from the federal government to ease the fresh round of petrol price pain, the treasurer says.

Fuel prices rose 9.1 per cent in August and were also up 13.9 per cent over the past year, which contributed to a rise in overall inflation for the month from 4.9 per cent to 5.2 per cent.

The first rise in monthly inflation in four months has stoked fears the Reserve Bank could look to raise interest rates further.

Treasurer Jim Chalmers said while petrol prices had risen, measures such as cutting the fuel excise as a way to lower costs was not on the cards.

“We’re doing (cost of living relief) in a way that takes some of the edge off inflation rather than adding to it,” Dr Chalmers told ABC Radio on Thursday.

“Petrol prices have come up, that’s largely a consequence of a global shortfall. The oil producers have cut back, and when they do that, there are issues with supply and that pushes the price up.”

The fuel excise tax was temporarily halved last year under the former coalition government when the war in Ukraine and supply chain disruptions sent petrol prices soaring.

The full tax has since been reinstated.

Despite the uptick in the monthly consumer price index, the treasurer said it was a “slightly more encouraging picture” when volatile items were stripped out. 

“Inflation is moderating overall, we’ll get these bumpy and lumpy figures month to month from time to time, but it’s moderating overall,” he said.

AMP economist Shane Oliver said the broad trend in inflation was down but there was still a long way to go to get price pressure under control. 

He said underlying measures and services inflation were proving hard to budge.

The Reserve Bank was likely to hold at the October interest rate meeting, the economist told Sky News, so it could wait for the September quarter inflation numbers.  

“Now we think that the cash rate is probably at its peak, but I have to say the risk of another rate hike is still very high, probably around 35 per cent or thereabouts,” he said.

Retail trade and job vacancy figures to be released on Thursday will add more information to the economic picture ahead of the October cash rate call.