Fuel Excise Discount Ends: Higher Petrol Prices Ahead

Australia's fuel excise discount is set to end on August 2, which could lead to higher petrol prices for motorists. The federal government introduced a 60% discount in April, cutting the fuel excise rate from 52.6 cents per litre to 20.6 cents.

The government has estimated it will lose A$2.5 billion in revenue due to the discount, and an extra $400 million after extending it. The Reserve Bank of Australia (RBA) estimates that the excise cut would reduce headline inflation by 0.5 percentage points.

However, it's unclear whether the fuel excise discount helped ease inflation, as the underlying cost of fuel has been falling steadily in recent months. When the discount ends, fuel prices are likely to go up by 16c per litre, which could lead to people using less fuel and driving more efficiently.