Service stations are on notice over any unwarranted price spikes as fuel costs at the bowser rise in the wake of tax relief measures being rolled back.
A 32-cent per litre discount on petrol and diesel ended on July 1 when it was halved to 16 cents.
The remaining fuel-relief measures, which were brought in because of the Middle East conflict and resulting closure of major shipping route the Strait of Hormuz, will stay in place until the start of August.
Service stations and oil suppliers would be monitored closely for price rises, Treasurer Jim Chalmers said.
“Servos and suppliers are on notice,'' he said.
“The regulator will be watching them like hawks.
“We’ve jacked up the penalties for petrol stations that rip off Australians. They face multimillion-dollar fines if they break the law.”
Drivers are still set to to save about $11 (US$7.6) on a 65-litre tank through the 16-cent discount.
It was possible the fuel excise cuts could be extended beyond the end of July if needed, Environment Minister Murray Watt said.
“We‘ll keep it under review, but I think realistically it’s not possible to have that kind of discount forever,’' he told ABC Radio.
“Obviously, fuel prices have fallen significantly and in some cases I think they’re actually below where they were when that crisis started.”
Petrol prices for regular unleaded are 52 cents a litre cheaper in Melbourne compared to when the war started on February 28, 45 cents cheaper in Brisbane and 33 cents lower in Sydney.
However, diesel prices have largely stayed at similar levels or increased slightly since the start of the Iran conflict.
The largest diesel price increase was in Hobart with a rise of 11 cents a litre, followed by five cents in Adelaide and three cents in Sydney.
Chalmers said despite a fall in global oil prices, the extension of the fuel excise measures would still play a role for cost-of-living relief.
“Even though inflation came down again in the figures released last week, and unemployment came down again last week as well, we know that people are still under pressure,” he told parliament.
That shock to household budgets was much larger for people on lower incomes than it was for wealthier Australians, according to a report by the e61 Institute.
‘'Low-income households spend a much larger share of their incomes on petrol, meaning they are hit harder by price rises,” the institute’s economist Adit Maitra said.
The research found Australians are more sensitive to petrol and diesel price rises than previously thought, with a 10 percent cost increase correlating with a 3.8 percent fall in fuel consumption.
Scaling back the fuel excise would hit low-income households harder, but that did not mean the measure should remain in place, Maitra said.
The excise cut was poorly targeted because it disproportionately benefited high-income households who used the most petrol, he said.
