A flagged cut to petrol taxes in Tuesday night's federal budget has been welcomed by local transport firms, but fuel prices could stay higher in rural areas longer than the city.
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Meanwhile, one local economist is concerned a stimulatory budget could drive up inflation, and ultimately interest rates.
The Commonwealth last night vowed to slash the fuel excise by 22 cents a litre, half of its current rate of 44 cents. The measure went into effect at midnight last night.
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The cut, which is designed to give short-term relief at the bowser during the Ukraine crisis, is slated to last just six months.
University of New England senior lecturer in macroeconomics, Dr Shawn Leu, said the cut was likely to be worth about $5 per tank for the average vehicle.
"Presumably for the purpose of smoothing out transportation cost, service stations in the country tend to purchase a larger amount in advance and therefore you see those prices to be stickier," he said.
"I would expect that, for example in Armidale $2.09 - even with the excise duty to be cut tonight, I would expect that price to stay where it is for a little while longer than prices in the city."
He said the relief was unlikely to have any impact on the drivers of petrol prices, which are international factors.
And rural service stations tend to get less regular, larger petrol deliveries, prolonging the time it will take for tax relief to trickle through to the bowser.
Agrigrowers Logistics owner-director Wade Lewis said between the Adblue crisis, the freight crunch and the war in Ukraine, his freight company has faced a 40 per cent rise in diesel costs in recent months.
Like all trucking companies, he's been forced to pass on the extra cost to customers. Prices will eventually flow through to everything, he said.
"Everything's delivered by truck. The only thing that's not delivered by truck is a baby," he said.
"Consumers will absolutely see a price increase across the board on all products if the diesel price remains high."
Mr Lewis said the tax cut was helpful, but not the ultimate solution.
"Any type of reduction is welcome," he said.
"But it is only temporary. Government is in very much a 'Catch 22' situation. That excise is what helps fund our roads."
Business NSW regional manager Joe Townsend said he expects the cut will have some effect on prices at the bowser, with petrol firms operating under the watchful eye of the ACCC.
Treasurer Josh Frydenburg said the cut should flow "over the next two weeks".
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