Motorists warned to fill up ahead of tax

The excise was temporarily halved by the Morrison government in May to insulate drivers from soaring petrol costs largely caused by the conflict in Ukraine.

The Labor government has decided to restore the excise to the full amount on Wednesday.

Fuel prices are not expected to jump immediately as retailers worked through supplies of discounted petrol, but Compare the Market energy expert Chris Ford said motorists would start feeling the pinch soon.

He recommended shopping around because prices could vary wildly across petrol stations in the same location.

"Just checking out a fuel comparison app can take a matter of seconds but can very often find cheaper fuel that's one suburb or even one street away," Mr Ford said.

He said there was a 40 cent difference between the cheapest and most expensive fuel in many capital cities.

"If you're filling a 50-litre tank, that could mean a saving of $20 at the pump. If you can find that cheaper fuel every week, that's a $1000 over the course of the year," Mr Ford said.

He said the wholesale price had dropped substantially since the start of the month but retail prices had spiked.

The national average retail price was sitting at $1.74 a litre last week, according to the Australian Institute of Petroleum report, which was a 10.4 cent lift.

The average wholesale price was $1.50 a litre, down 2.1 cents from the week before.

The Australian Competition and Consumer Commission will keep a close eye on retailers to make sure they don't charge unjustifiably high prices once the tax is reinstated.

The high cost of fuel and other essentials such as food and housing is hitting vulnerable households hard, with job seekers on welfare living off just $48 a day.

An Australian Council of Social Service survey of people on JobSeeker, Youth Allowance and the Parenting Payment found 70 per cent had difficulty getting to work and doctors appointments due to the cost of fuel.

"People on low, fixed incomes were already struggling with covering basic costs before the cost of living skyrocketed," ACOSS acting chief executive Edwina MacDonald said.

"Economists and commentators speak reassuringly of 'buffers' but there is no buffer when your income is $48 a day, let alone in the face of surging prices for petrol, food, and rent."

Nationals leader David Littleproud called on the government to address cost of living pressures in the federal budget.

"(Treasurer Jim Chalmers) is saying this will be a bread and butter budget. Well, he's dead right because that's about all Australian families will be able to afford after he finishes with them," he said.

"You've got fuel, you've got food, you've got energy and interest rates all bearing down on Australian families."

The Labor government will hand down its first budget on October 25.

Australian Associated Press