Plans to extend a cut to the fuel excise tax are being examined by the Albanese government ahead of the federal budget.

The fuel excise was halved for six months by the previous Coalition government in March, in response to soaring fuel prices, with the cut slicing 22 cents off a litre of petrol.

It was expected to cost the federal budget $2.9 billion and is due to run out in late September.

While there has been growing pressure for the temporary measure to be extended beyond its six-month deadline, the new Labor government has been adamant the full tax will be restored, citing budget pressures.

However, Prime Minister Anthony Albanese has left the door open to keeping the tax cut in place for longer.

“We are examining it. We can’t do everything we want to do,” Mr Albanese told Sydney radio station 2GB on Wednesday.

“We’re having a look at the circumstances which are there, but we have made it very clear that with regard to petrol, the cost of the budget is so enormous. I just can’t see a way through on that issue.”

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

Mr Albanese has repeatedly cited the need for fiscal discipline, off the back of more than $1 trillion in government debt.

“We have to make decisions based upon there’s a limited amount of money,” he said. “We have to get the budget back on track.

“If we’re going to do issues like cheaper child care, if we’re going to offer support for cheaper medicines, which we will, then you can’t just continue to not worry about the budget.”

Petrol prices remain well below the peaks seen in June, with recent data from the Australian Institute of Petroleum revealing fuel is between 25 and 50 cents a litre lower than the highs of two months ago.

While wholesale fuel prices dropped by more than two cents last week, the national average for unleaded climbed by 3.6 cents per litre, the first rise in six weeks.

Mr Albanese’s change of language came weeks after claims that oil companies had fattened their profit margins rather than deliver the excise cut to motorists.

Figures from Fueltrac show the gap between wholesale and retail petrol prices widened in many cities after the petrol tax was halved in March – and did so again in July.

Fueltrac CEO Geoff Trotter told The New Daily the discrepancy showed hundreds of thousands of motorists, particularly those across regional areas, did not fully benefit from lower oil prices as retailers passed on the excise cut.

Mr Trotter argued the 22.1 cents per litre tax holiday made it easier for service stations to reduce bowser prices without passing on falling wholesale costs.

– with AAP