After six months of fuel prices fluctuating, the fuel excise tax has returned this week. Steve Shearer of SARTA is urging operators to be vigilant and report any price spikes to the ACCC or their equivalent state office.
It’s been a barren year for transport operators when it comes to fuel prices.
Earlier this year, international factors meant the price of diesel rose to an eye-watering amount. Operators struggled. Smaller companies shut. Some dipped into super and drew on every fund possible to stay afloat.
Over the past few months, the price has steadily returned to normal and some sub-contractors have fought for better fuel rates to be locked into their contracts.
Yet, with the price of fuel recently rising, the fuel excise tax has been re-introduced, putting even more pressure on operators.
South Australian Road Transport Association (SARTA) executive director Steve Shearer says the return of the previously removed fuel excise makes for a dangerous time for operators who have struggled to pay for fuel in the past.
“When the old federal government removed the excise tax at the end of March, it made it clear it would take a while for the cut to hit the pump due to the remaining stock in the ground,” Shearer told ATN. “They told us it would take two to four weeks to see the price drop.
“Now, we’re concerned that on the other side of it, fuel providers will very quickly jack up the price and hang operators out to dry.”
When the fuel excise’s temporary removal took its time to hit bowsers in Australia and the fuel tax credit was scrapped, the Australian Taxation Office (ATO) stepped in to provide interest-free loans for those struggling to make Business Activity Statement (BAS) payments. Shearer says this provided a limited benefit for those in need.
Fast forward to this week, when the excise tax was restored on midnight September 28, and Shearer is concerned that there’ll be no financial help for operators if fuel providers decide to price gouge.
“Currently in the ground is more than 700 million litres of fuel that distributors have only paid the previous rate of 22.1 cents per litre on, and that’s all they should charge the customer,” Shearer says. “If they now start charging the full, returned, 46 cents per litre excise tax on this fuel, unless their tanks were empty of fuel last night, they’re gouging on the excise.
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“They shouldn’t do this unless the price is on new stock that was supplied after midnight September 28. If they do, it’s unacceptable and un-Australian.”
With the returned excise jumping up from the previous rate of 44.2 cents per litre to 46 cents per litre, Shearer is trying to prevent operators from being extorted with price gouging. The SARTA executive director is actively warning operators to check the price of fuel and report any inflated prices.
“I’m trying to warn the industry not to get burnt on both ends of this six-month debacle,” Shearer says.
“If anyone sees prices whacked straight back up, they need to report it and make sure these outlets are then forced to explain how they are charging the extra 46 cents on the first day of the excise’s return.”
Shearer is recommending operators who notice high prices report the provider to watchdogs such as the Office of Business and Consumer Services in Adelaide.
This morning, a South Australian minister told drivers that the BCS is watching fuel prices move and will accept all complaints, as it requires fuel providers to register fuel price increases within half-an-hour of the rise.
Shearer says he has no qualms in telling people to report suspiciously high fuel prices to the ACCC and other bodies.
The SARTA executive director says he’s also concerned protecting against price gouging won’t be enough to prevent operators from struggling financially once the new excise rate is applied.
Even if he can stop operators from being gouged 23.9 cents per litre between the change in excise rates, Shearer says transport companies still face difficult conversations with customers.
“When the fuel price rose in March, operators struggled to have fair conversations with customers due to there being barely any savings when the fuel excise was removed, because the fuel tax credit was also taken away,” Shearer says.
“Now more customers will be conscious of the structure of fuel pricing and will have to accept increases in rates due to the excise returning and rising again.
“The worry is that the bulk of the industry have to take the prices they can get, meaning they aren’t in positions to negotiate.
“It could get ugly for small and some medium-sized operators if this happens.”