The federal budget is slashing 22 cents a litre on petrol

For the next six months, the budget will see fuel prices slashed by 22.1 cents a litre.

The cut comes as part of the budget's cost of living package.

Treasurer Josh Frydenberg said a family with two cars that fill up once a week will save $30 a week, or around $700 over the next six months.

"Whether you're driving to and from school, or to work, or visiting family or friends, it will cost less," he said.

"This will flow into the bowser over the next two weeks."

Mr Frydenberg said the Australian Competition and Consumer Commission will monitor retailers to make sure the savings are passed on in full.

"This temporary reduction in fuel excise will not come at the cost to road funding, which will see more than $12 billion spent in the coming year," he said.

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The reduction in the excise comes after most of Wagga's petrol stations have been charging more than $2 for a litre of regular unleaded fuel over the last few weeks as a result of Russian sanctions and supply shortages.

Wagga resident Shahid Aaymon said while it is pleasing to see the "ridiculously expensive" fuel prices being acknowledged, he is hesitant in trusting that the excise cut will be enough.

"It is good to see the government taking action because a lot of the time issues go ignored, but whether this will benefit us or not, we will see," he said.

"The current prices of petrol are too expensive."

NRMA head of media Peter Khoury said while he is pleased to see the government targeting roads and fuel in the budget, he isn't confident a 22-cent fuel excise cut is the right avenue to take.

"Our fear is that the 22 cents might get eaten up in profit margins or an increase in oil prices," he said.

"If oil prices go back up, the 20 cents is going to get eaten up.

"We desperately need relief, significant relief, but that will only come from oil prices falling."

Australian Competition and Consumer Commission chairperson Gina Cass-Gottlieb said they will be contacting petrol retailers to set clear expectations that the savings are passed on to consumers, and to let them know they will be monitoring their margins.

"We expect that fuel retailers will pass on the cut in fuel excise to reduce the price at the bowser as soon as possible," Ms Cass-Gottlieb said.

"If retailers make false or misleading statements to consumers that they have passed on the savings when they have not, the ACCC will not hesitate to take appropriate enforcement action."

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