Prime Minister Anthony Albanese has stood firm on ending the fuel excise discount this month, acknowledging inflationary pressures are set to rise.

It comes as petrol prices are expected to soar at the end of the month, with the consumer watchdog being asked to keep a close eye on retailers and wholesalers for any unfair behaviour.

The Albanese government has resisted calls to extend the cut, due to end on September 29, citing budget pressures.

Mr Albanese described it as a “difficult decision”.

“If prices rise … of course, it has an impact, but that has been factored in of course, by the economic analysis, which has been done,” he told ABC radio.

“We have to make decisions based upon what we can afford, and we have $1 trillion of Liberal Party debt.”

The Reserve Bank is tipped to raise rates by at least 50 basis points on Tuesday, adding to the squeeze on households.

Mr Albanese said he maintained full confidence in the Reserve Bank’s management of inflation.

“I think it’s appropriate that the government allow the RBA to do its job,” he said.

“There is, of course, a review taking place of the RBA but … there’s nothing unusual about that, that’s happened before.”

In March, the former Coalition government halved the fuel excise by 22 cents for six months, in response to soaring fuel prices.

Treasurer Jim Chalmers has written to the Australian Competition and Consumer Commission to ensure retailers do not penalise customers ahead of the reintroduction of the full fuel excise.

The watchdog is being asked to ramp up its monitoring of anti-competitive retailer behaviour and to analyse fuel prices on a daily basis when the full excise is reinstated.

It will also write to fuel companies about passing on any price rises and will warn against giving customers misleading reasons for increases.

The commission has also been asked to notify consumers about the best times to buy petrol based on their locations and price-cycle data.

The letter to ACCC chair Gina Cass-Gottlieb was about making sure Australian motorists got a fair deal at the bowser, Dr Chalmers said.

“Refiners, importers, wholesalers and retailers should consider themselves on notice; the ACCC is keeping a very close eye on fuel prices across the country to make sure any increases are justifiable,” he said.

“There should be no doubt that if there is evidence of misleading or anti-competitive conduct by fuel retailers, the ACCC will take action.”

The watchdog is due to release its latest report on retail petrol, diesel and automotive LPG prices for the June quarter on Monday.

-AAP