Fuel Price Hikes Loom as Excise Cut Ends

Motorists are bracing for higher fuel prices as the federal government's fuel excise cut comes to an end. The excise reduction, which has been in place since March, will return to its normal amount at midnight on August 3, adding 16 cents per litre to wholesale prices.

RACQ principal economist Ian Jeffreys estimates it will take about 10 days for the change to flow through to the bowser. He forecasts unleaded fuel prices to increase to around $2.20 a litre and diesel to reach $2.60 a litre, advising drivers to 'fill up as soon as possible' to avoid paying more.

The end of the excise cut coincides with a jump in global oil prices from below $US85 a barrel to about $US90 over the past fortnight. If tensions in the Middle East persist, Jeffreys warns that increased oil prices could push bowser prices up further.