Commodities News

Australia flags move on high fuel prices as election nears

(Reuters) -Australian Treasurer Josh Frydenberg on Sunday indicated the federal government would likely act to lower petrol prices in the upcoming federal budget, weeks out from a general election.

The government has recently come under pressure to cut fuel excise as petrol prices hit an eight-year high, while Prime Minister Scott Morrison lags in the polls in the lead up to the election, due in May.

Asked by Nine Entertainment if the government would announce in Tuesday’s budget a cut to the 44.2 cents a litre fuel excise, Frydenberg said he understood a key concern for Australians was petrol prices.

“What we will do on Tuesday night is provide relief for those families recognising that fuel costs are very high right now,” he told the broadcaster.

Frydenberg would not be drawn on individual budget measures the government would take on petrol, but said it recognised bowser prices had lifted due to rising global oil prices.

As global oil prices soar due to the boarder impact of war in Ukraine, petrol recently hit A$2.20 a litre in several Australian cities.

“A barrel of oil is up by 50% since the start of the year. That’s flowing through to the bowser here at home. We recognise that pressure,” Frydenberg said.

He said Tuesday’s budget would mark a very significant material improvement to the government’s bottom line, but refused to project whether a budget surplus would be recorded in the next decade.

Prime Minister Scott Morrison echoed Frydenberg’s comments, telling reporters in Western Australia the budget would deal with cost of living pressures being felt by Australians.

“Because of what we’re seeing in Ukraine, the impacts on fuel prices, we know that this is biting,” he said.

Labor treasury spokesman Jim Chalmers said the federal opposition wanted cost of living relief in the budget that secured a better future for Australians, including on petrol.

“Petrol is a big part of the story as everybody knows,” he told ABC television.

The government will hope the budget bolsters its support after the latest Newspoll showed Labor leading the coalition of Liberal and National parties.

Source : Reuters

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