CANBERRA, AAP – Prices at the petrol bowser struck fresh record highs in the past week, prompting more calls for a cut in fuel excise to prevent a further blow out in the cost of living.
The Australian Institute of Petroleum said the national average price for unleaded petrol rose a further 3.3 cents in the past week to 183.9 cents per litre.
Places like the Northern Territory and Tasmania were paying around 195 cents per litre on average.
Independent senator Rex Patrick wants fuel excise halved to 22 cents a litre to help every Australian family and small business, which would come at a $6 billion impact on the budget.
“Otherwise we are going to have huge inflation problems,” Senator Patrick told Sky News on Monday.
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Treasurer Josh Frydenberg has previously rejected such calls, saying that the money received from fuel excise goes directly into funding infrastructure projects.
The steady climb in petrol prices has been fuelled by rising global oil prices – first as a result of the reopening of economies from the pandemic, but more recently by Russia’s invasion of Ukraine.
The rate of inflation in Australia was already at 3.5 per cent at the end of 2021, above the Reserve Bank of Australia’s two to three per cent target.
Some economists now think rising price pressures will force the central bank to lift the cash rate as early as June.
Following last week’s monthly RBA board meeting, governor Philip Lowe kept to the script of remaining patient before lifting the cash rate from a record low 0.1 per cent.
Dr Lowe confirmed his commitment to driving the economy to full employment by keeping interest rates low for as long as possible.
But he did say the Ukrainian invasion is a major source of uncertainty.
The RBA and Treasury expect the unemployment rate will fall below four per cent later this year and stay there, something that hasn’t been achieved in some 50 years. It was 4.2 per cent in January.
New figures show demand for workers spiked after the COVID-19 Omicron wave receded, pointing to an even lower unemployment rate in the months ahead.
The ANZ job advertisement series jumped 8.4 per cent in February to be 31.5 per cent higher than a year earlier.
“This supports our view that labour demand will continue to rise and competition for workers intensify,” ANZ senior economist Catherine Birch said.
ANZ is now forecasting the unemployment rate falling to the “low threes” by late 2022.
Meanwhile, Australia’s service sector businesses grew strongly in February, building on the gains seen over the December-January period.
The Australian Industry Group performance of services index rose by 3.8 points in February to 60, to stand well above the 50-point mark that separates expansion from contraction.
Ai Group chief executive Innes Willox said sales, employment and new orders all grew strongly in February.
He said prices of inputs and wages were up in the month, but not as dramatically as in the manufacturing and construction sectors, while selling prices remained at a level that suggests there was a capacity to recover a proportion of cost increases.
Retail trade and hospitality, and health and education sectors proved the strongest performers in the month, while logistics services, personal, and business and property services sectors also improved.
“With solid growth and a tight labour market, staff shortages and difficulties filling positions requiring skilled staff dominate concerns, while supply disruptions are also presenting more than a few headaches,” Mr Willox said.