The competition watchdog has been ordered to monitor fuel retailers who might seek to take advantage of the looming reset to the full fuel excise in a few weeks' time.
The fuel excise will rise by 22 cents from September 29, returning to the full impost, after it was temporarily halved by the former government as global pressures forced a spike in prices.
Treasurer Jim Chalmers has refused calls to extend the cut beyond the end date set by the Coalition, saying it would be too costly to the budget.
Yesterday, he wrote to the Australian Competition and Consumer Commission requesting it to ramp up its monitoring efforts over fuel retailers ahead of the hike.
"I've said to you many times over the last six months or so that it would be too expensive to continue that petrol price relief indefinitely," Mr Chalmers said.
"Australians understand that we've inherited a budget which is heaving with a trillion dollars in Liberal Party debt and that means some difficult decisions, including this one."
Prime Minister Anthony Albanese acknowledged it would lead to more inflation.
"If prices rise ... of course it has an impact, but that has been factored in by the economic analysis which has been done," Mr Albanese told ABC Radio.
"That's something that was agreed and that's something that will happen at the end of this month."
Shadow Treasurer Angus Taylor said Labor's October budget must provide cost-of-living support.
"Right now they have not provided any kind of proactive plan, and they need to," Mr Taylor said.
Record prices despite excise cut
On Friday, the ACCC published its latest monitoring report, which found the cut to the fuel excise led to sharp falls in petrol prices around the country.
It found that the cuts had been passed on "to a large extent", with a six-week lag between the wholesale price of petrol and the price at the bowser.
Global prices have been falling since late June, with the benchmark cost of regular unleaded petrol down 42 cents per litre and diesel down 22 cents per litre.
In that same time, retail petrol prices fell between 25 cents and 54 cents in the five major cities, and 36 cents on average across regional Australia.
However, in a report released on Monday, the ACCC said the fuel excise cut was still not enough to prevent petrol prices reaching a 14-year high.
Its chair, Gina Cass-Gottlieb, said the ACCC would not hesitate to "take action" if retailers made misleading statements on price movements or there is evidence of anti-competitive behaviour.
"We will shortly be engaging with fuel wholesalers and retailers to say that we do not expect to see uncharacteristic or abnormal wholesale and retail price increases in the days leading up to, and on the day of, or after, the reintroduction of the full rate of fuel excise," Ms Cass-Gottlieb said.
The ACCC publishes monitoring reports on petrol retailers but does not have the power to set prices.
