Small businesses brace for cost increases as fuel excise reduction nears its end

As Australian motorists prepare for a steep increase in petrol prices later this month, small business owners are dreading the end to the six-month fuel excise reduction.

In order to reduce the impact of high international oil prices and cost of living pressures experienced by Australian households and small businesses, the previous federal government announced a 50% cut in fuel excise as part of its 2022 federal budget in March this year.

Under the budget, the excise and excise equivalent customs duty (excise) rates for petrol, diesel and all other fuel and petroleum based products were halved for six months, ending on September 29, 2022.

The rates were reduced from 44.2 cents to 22.1 cents per litre for petrol and diesel, with RACV declaring in late March that the reduction in the excise will see motorists save roughly $15 when filling a 60-litre tank of unleaded fuel.

But for small business owners, a typical trip to the servo to fill up their tank is about to get more expensive, with the Albanese government deciding to put an end to the six-month fuel excise reduction which will see the price of petrol go up by 25 cents a litre.

Greater Caboolture Chamber of Commerce (GCCC) president Naomi Cauley says the rising petrol costs was an added stress for small business owners.

“There is a lot of stress and a lot of pressure on small business owners,” she said.

“As a result of petrol prices going up, small businesses will experience an increase in freight charges. They either have to absorb the costs or raise their prices for customers. Tradies in the building industry who operate their own business will be affected as they have to drive from site to site. 

“This is really going to affect small business owners across the board.”

Australian Small Business and Family Enterprise Ombudsman Bruce Billson says small businesses have provided employment for more than 5 million Australians.

“Small business people take on a big and often stressful responsibility. It is not just an enterprise but their life — often their home and mortgage, family and identity are all tied together,” he said.

Australasian Convenience and Petroleum Marketers Association chief executive Mark McKenzie has urged small businesses to start shopping around for cheaper fuel prices.

“One key thing I would encourage small business owners to do, is to shop around by using fuel price apps as prices will vary from place to place,” he said.

Treasurer Jim Chalmers has written to the Australian Competition and Consumer Commission (ACCC) urging Australia’s competition regulator to keep tabs on fuel prices once the fuel excise reduction ends.

“Refiners, importers, wholesalers and retailers should consider themselves on notice — the ACCC is keeping a very close eye on fuel prices across the country to make sure any increases are justifiable,” said the Treasurer.

“There should be no doubt that if there is evidence of misleading or anti-competitive conduct by fuel retailers, the ACCC will take action.”