A spike in petrol prices to well above $2 a litre will hit hip pockets everywhere from the bowser to supermarket shelves, experts warn.
The warning comes as two Nationals MPs call on the federal government to cut the fuel excise as petrol prices continue to climb towards $2.20 a litre due to global pressures including the Ukraine-Russia war.
Petrol prices have hit an eight-year high due to the Organisation of the Petroleum Exporting Countries refusing to boost crude oil production, according to Australia's consumer watchdog.
"The world was already experiencing high crude oil prices late last year due to the continuing actions of the OPEC and Russia cartel, and the enduring northern hemisphere energy crisis," ACCC chair Rod Sims said.
"The shocking events in Ukraine have forced crude oil prices even higher, as Russia is a major supplier of oil."
The NRMA's Peter Khoury says the increase will inevitably be passed on to consumers through other goods as well with truck fleets now paying more than double the average price of fuel compared to April 2020.
"Diesel is the fuel that our economy runs on. Farming, agriculture and mining, transport, small businesses that run fleets," he told the ABC on Monday.
"This is coast to coast and we have never seen anything like it in history. Your family will feel it at the bowser, in the supermarket aisles and everywhere else."
Queensland senator Susan McDonald and Victorian MP Anne Webster want the 44-cents per litre excise cut to help reduce cost of living pressures.
Senator McDonald says the government should also look at pausing at least a portion of the excise.
"We just can't afford to absorb the prices that we're looking at currently," she told the ABC.
Ms Webster has contacted Treasurer Josh Frydenberg about providing relief at the bowser.
The government is also facing pressure from Liberal premiers over the tax with NSW Premier Dominic Perrottet, South Australian Premier Steven Marshall and Tasmanian Premier Peter Gutwein supporting a cut.
But one of Australia's key economists says excise is not a lever the government should pull to ease prices.
Deloitte Access Economics' Chris Richardson told Sky News the extra billions going back into the economy would push interest rates and inflation up faster.
"People would lose (the money) in terms of higher prices, higher interest rates - this is not an easy fix because there is not an easy fix to be had," he said.
While not ruling out a cut to the excise ahead of the federal budget being delivered on March 29, Prime Minister Scott Morrison says any cut might not make a difference given petrol prices have risen from around $1.70 to $2.20 - more than the full cost of the excise.
Senior Liberal MP Tim Wilson said the tax was there to pay for roads and any cut would need to be balanced against a loss of revenue for the government.
The fuel excise is expected to raise almost $50 billion over the next four years, with almost $47 billion to go toward land transport projects, according to the Australian Automobile Association.
Mr Wilson said releasing fuel reserves would only be a temporary solution if global instability underpinned by Russia's invasion of Ukraine caused the price of oil to soar.
Australia joined 30 countries in releasing a combined 60 million oil barrels from reserves to stabilise prices after Russia's invasion of Ukraine caused a spike in prices.
Thirty million barrels of oil will come from the US strategic reserve.
© AAP 2022