Andrew Watson, owner of Warrnambool Radio Taxis, said he had been hit with massive cost spikes in the past couple of years.

"It's a bit of a battle to try and make ends meet at the moment," Mr Watson said.

He said he was concerned about the fuel excise cut ending this week, which could see prices jump about 20 cents a litre.

"Our costs have been going up across the board," Mr Watson said.

"The cost of fuel not only affects us - it affects a lot of the services we use and their prices increase."

Mr Watson said he would monitor the fuel prices over the next few months before considering a fare increase.

"You can only absorb so much and then you have to adjust the fares accordingly," he said.

Mr Watson said he would be reluctant to increase fares, something he hasn't done for a number of years.

"We have the flexibility to increase prices but everything is expensive enough as it is," he said.

"People are copping increases left, right and centre and a big proportion of the people who use our services are elderly and on pensions.

"We will monitor it for a month or two and see how the bottom line goes."

Mr Watson said he was still struggling to find new taxi drivers to cover each shift in the company's 13 cars.

The federal government said this week motorists should not see an immediate uptick in petrol prices with the fuel excise cut ending.

The hike shouldn't happen straight away, with about 700 million litres of petrol having been purchased by retailers beforehand.

"We would look very firmly down on any petrol station that has supplies purchased under the previous arrangement that sees the need overnight to jack the price up 23 cents a litre," Finance Minister Katy Gallagher said.

Assistant Treasurer Stephen Jones warned companies against upping prices immediately, saying the consumer watchdog, the ACCC, would be closely monitoring the situation.

He said the government couldn't continue to afford the tax cut as it balanced rising interest rates.

The NRMA's Peter Khoury is urging oil companies to cut fuel prices, saying oil has plummeted below $US100 a barrel, almost on par with pre-pandemic pricing.

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