Petrol prices could surpass $2 a litre and diesel $2.40 in coming days, after the government\u2019s 16-cent discount ends on Sunday.<\/p>\n
The 32-cent per litre reduction in fuel excise, introduced in March at the peak of the fuel price spike, was halved to 16 cents in July.<\/p>\n
The excise will return to its normal level on 3 August, adding 16 cents per litre to the wholesale prices paid by service stations.<\/p>\n
Chris Bowen, the energy minister, told reporters on Saturday the government would not extend the temporary cost-of-living relief.<\/p>\n
\u201cObviously we always monitor the situation and take steps as necessary, but our policy decision is clear,\u201d Bowen said.<\/p>\n
Sign up for the Breaking News Australia email<\/a><\/p>\n A 16 cent increase in fuel prices would add $8.80 to the cost of filling up, for a vehicle with a 55-litre tank.<\/p>\n Tom Woodlock, a senior market analyst at Argus Media, said service stations typically took four or more days to adjust prices at the pump to match changes in excise or overseas pricing.<\/p>\n Retailers have already passed higher wholesale fuel prices on to customers after the US resumed strikes on Iran in mid-July, pushing up oil and import costs<\/a>.<\/p>\n Unleaded petrol prices have risen to 205.6 cents per litre in Canberra, 204.4 in Darwin and 200.5 in Hobart, according to MotorMouth data on Saturday.<\/p>\n Petrol costs more than 190 cents in every capital city, meaning it would pass 200 cents if the 16-cent increase was passed on in full.<\/p>\n Melbourne was facing diesel prices of 242.7 cents per litre on Saturday, up 68 cents from its June low of 173.9 cents, according to Motormouth. Canberra was at 244.4 cents a litre, Darwin at 244.1 and Hobart 241.8.<\/p>\n Diesel costs more than 235 cents per litre in every capital city except Perth, meaning it would pass 250 cents if service stations pass on the price hike in full.<\/p>\n Petrol price graph<\/a><\/p>\n The strait of Hormuz has been almost completely closed to traffic since Iran and the US returned to fighting two weeks ago. Iran struck two tankers under US escort<\/a> on Friday after the two countries resumed trading strikes<\/a> this week.<\/p>\n Brent crude oil, the global benchmark, has risen from about US$70 on 2 July to nearly US$90 on Saturday, pushing up import prices in Australia\u2019s region.<\/p>\n Some analysts have predicted oil prices will return to US$100 a barrel if conflict continues. In March, when oil hit that price, and Australia had no fuel excise relief, petrol surpassed 250 cents a litre, and diesel passed 300 cents.<\/p>\n