The competition watchdog will keep a close eye on service stations and petrol suppliers to ensure Australians are not treated as "mugs", Treasurer Jim Chalmers says.
Drivers already face soaring prices at the bowser but there are fears they could spike more than 20 cents a litre as the fuel excise cut, which has been in place for the past six months, ends on Wednesday night.
Dr Chalmers said he spoke with the Australian Competition and Consumer Commission on Wednesday morning.
"I have asked the chair of the ACCC to maximise their role in the petrol market to make sure servos and suppliers are not treating Australians as mugs," Dr Chalmers told reporters in Canberra.
He said there were hundreds of millions of litres of lower excise petrol in storage which should mean prices do not immediately spike.
"The ACCC will be particularly attentive to the fact that it was bought under the cheaper price ... there should not be an automatic uptick," he said.
Dr Chalmers reiterated the excise holiday could not continue as the government could not afford the $6 billion a year cost.
"We can't afford to fund every single piece of cost of living relief indefinitely."
The NRMA's Peter Khoury is urging oil companies to cut fuel prices, saying oil has plummeted below $US100 a barrel, almost on par with pre-pandemic pricing and wholesale prices have also dropped more than 50c per litre since June.
"Despite falling global prices and the full fuel excise tax not yet reinstated, prices in Sydney are approaching $2 per litre, meaning motorists are paying much more for fuel than they should be in the lead up to the October long weekend, he said on Wednesday.
"We need to see a correction immediately."
The cut to the fuel excise was put in place by the former coalition government for six months to help Australians struggling with the cost of living and soaring prices at the bowser due to the war in Ukraine.
Labor said it would continue with the six-month time frame without extension due to pressures on the budget.
The head of the Australasian Convenience and Petroleum Marketers Association said the situation had changed from when prices spiked after Russia invaded Ukraine.
"If ever there was a time where you'd be talking about reinstalling the excise, it's probably about now," Mark McKenzie told the ABC.
"Recessionary pressures are actually pushing the global price down.
"We're likely to see prices after the excise on an average basis ... lower than they were before the excise was cut in March."
Mike Roberts, from analysts Your Financial Wellness, said low-income earners would be particularly affected by the return of the full excise rate.
"Our research shows the lowest income group spends on average three times as much of their income on transport costs than the average person," Mr Roberts said.
"We also found households that spend more than 10 per cent of their income on transport are most likely to be financially stressed."
Motorists are advised to use price monitoring websites and apps, modify their driving style to save on fuel use, and carefully consider whether vouchers for major retailers offer value for money.
