- The end of the fuel excise discount will add 32 cents per litre to the cost of petrol, which equates to an increase of $17 per week and $74 per month for an average two-car household
- Should fuel costs continue to rise, a 60-cent-per-litre increase would result in $32 extra per week, while a full 100-cent increase would add $53 to the weekly fuel bill
- Truck drivers are set to be hit the hardest, with a 32-cent-per-litre increase to the cost of diesel adding $554 per week for a heavy-duty commercial vehicle
- By reviewing other household costs like car insurance, health insurance and energy plans, a two-car family on the most expensive available plans could save an average of $399 per month by switching to the cheapest
Australians will go back to paying through the nose for petrol and diesel from next month, as the Australian Government confirmed on the weekend that the current fuel excise discount would be scrapped at the end of June.
The discount, which came into effect on 1 April and will run until 30 June, allowed for a temporary reduction in fuel prices by 32 cents per litre.
Back in our March fuel survey, 33% of Australians told Savvy they wanted the Government to introduce cuts to the fuel excise.
It provided much-needed relief for Australians grappling with cost-of-living pressures that had been exacerbated by the ongoing conflict in the Middle East, with prices previously exceeding 250 cents per litre across parts of the country.
However, while it may not hit those peaks again, the end of the excise discount means prices will immediately bounce back up by at least the 32 cents it shaved off.
So, how much will fuel be setting you back from July?
$17 per week increase, but it could be just the start
If fuel prices immediately jump by 32 cents per litre, this will cost a typical household just under $17 more per week, which works out to an additional $74 per month and $883 per year.
You can see this increase in action based on last week’s average petrol price of 169.3 cents per litre cited by the Australian Institute of Petroleum (AIP):
| Fuel price/L | Annual fuel cost | Weekly cost |
|---|---|---|
| $1.693 | $4,673 | $90 |
| $2.013 | $5,556 | $107 |
| Typical household calculations assume two cars are owned and driven a combined 27,600km per year at a fuel economy of 10.0L/100km. Calculations rounded to the nearest dollar. | ||
However, there’s no guarantee that your petrol will only go up by 32 cents per litre, with fuel reserves set to be put to the test once again before the price rise kicks in.
Should prices continue to climb, you can expect to see the weekly increase nudge $30, $40 or even $50 per week, as the table below shows:
| Fuel price/L | Annual fuel cost | Weekly cost | Weekly increase |
|---|---|---|---|
| $1.693 | $4,673 | $90 | N/A |
| $1.893 | $5,225 | $100 | $11 |
| $2.093 | $5,777 | $111 | $21 |
| $2.293 | $6,329 | $122 | $32 |
| $2.493 | $6,881 | $132 | $42 |
| $2.693 | $7,433 | $143 | $53 |
| Typical household calculations assume two cars are owned and driven a combined 27,600km per year at a fuel economy of 10.0L/100km. Calculations rounded to the nearest dollar. | |||
If the overall fuel price increase hits 60 cents per litre, that’s $32 per week (or $1,656 per year) more than what you’re paying right now.
“Australians have been copping it this year, especially since the onset of the Middle Eastern conflict, so the return of the full-priced excise will unfortunately bring back pressure for plenty of families,” Savvy Managing Director Bill Tsouvalas said.
“$17 per week may not sound like a lot, but every dollar counts when we’re talking about household budgets that are already at breaking point.”
Truck drivers set to pay $500+ extra per week
Although the average Australian driving a fuel-based car could be impacted substantially, the biggest losers when it comes to the discount ending are truck drivers.
As trucks run on the more expensive diesel (priced at an average of 206.7 cents per litre last week, according to the AIP), drive much longer distances and are far less economical when it comes to fuel, drivers will feel the pinch straight away.
For a heavy-duty truck driven 200,000km per year with an economy of 45.0L/100km, the 32-cent increase adds up to an additional $554 per week, or $28,800 annually.
Here’s what a driver would have to pay for this truck should diesel prices continue to spike:
| Fuel price/L | Annual fuel cost | Weekly cost | Weekly increase |
|---|---|---|---|
| $2.067 | $186,030 | $3,578 | N/A |
| $2.267 | $204,030 | $3,924 | $346 |
| $2.467 | $222,030 | $4,270 | $692 |
| $2.667 | $240,030 | $4,616 | $1,038 |
| $2.867 | $258,030 | $4,962 | $1,385 |
| $3.067 | $276,030 | $5,308 | $1,731 |
| Calculations assume truck is driven 200,000km per year at a fuel economy of 45.0L/100km. Calculations rounded to the nearest dollar. | |||
For a 60-cent increase per week, drivers are looking at over $1,000 more each week, which can add up for businesses with large fleets of vehicles.
How families can beat the $74 monthly fuel bill jump
The impact of the fuel excise’s return is sadly unavoidable for most Aussies, but that doesn’t mean there’s nothing you can do to alleviate potential stress on your household budget.
Here are a few simple things you can do to offset the impending price hike:
- Review your car insurance policies: Aussies are costing themselves thousands each year by simply letting their car insurance roll over. Our research shows there’s an average of $1,310 between the cheapest and most expensive annual car insurance policies through Compare the Market, equating to a potential monthly saving of $218 for a standard two-car household. Sydney has the greatest differential at $327 for two cars.
- Make sure you’re getting value for money on health insurance: your potential health insurance savings could also be significant. For example, a family only needing cover for ambulance, physio, general dental and optical could take out cover for as little as $194 per month on a basic policy. However, on a basic policy with maxed-out coverage, you might be paying as much as $372, leaving $178 on the table each month (via Compare Club).
- Check out the cost of your energy plan: the same is true for energy, with annual price discrepancies ranging from $280 in Hobart to $609 in Sydney between the cheapest and most expensive plans on the market in different states (via Econnex). This works out to an average of $38 saved per month.
- Set out a household budget and stick to it: if you haven’t sat down and run through your finances with a fine-tooth comb, it’s worth doing so. Work out exactly where your money is going so you can trim any excessive or unnecessary spending and focus on the essentials.
- Get smart with refuelling: keeping a close eye on fuel prices allows you to take advantage when they’re at their lowest. Using petrol pricing apps will help you do this, while you can also chip a bit of money off your refuelling bill by flashing your grocery rewards card or being a member of certain roadside assistance or insurance providers.
By combining the potential savings on different insurance policies and energy, an average two-car family on the most expensive available plans could save as much as $399 per month by switching to the cheapest offerings.
Sydney families would be set to save the greatest amount, with both insurance policies and energy totalling $520 in potential savings across the month.
