Fuel companies can absorb price increase - AA

The excise tax on petrol is rising from 48.5 to 50.5 cents per litre. Photo / AP

Fuel companies are being urged not to pass on a two cent a litre tax hike to customers.

The excise tax on petrol is rising from 48.5 to 50.5 cents per litre today with diesel Road User Charges increasing by the same amount.

It means the average motorist will be paying $700 a year in excise.

The Automobile Association spokesman Mark Stockdale says fuel companies can afford to absorb the increase.

"Prices are above average anyway and the amount of money that the fuel companies are making is higher than we would expect."

Mr Stockdale says if the tax wasn't increasing, the AA would be calling for a price cut.