Some parts of the country are already paying record levels of more than $2 a litre at the bowser, with the price destined to go even higher following a spike in world oil prices to around $US130 a barrel.
"It is the expectation that oil prices will remain elevated for sometime as tensions remain across Europe," Mr Frydenberg told the ABC on Thursday.
There is speculation the government will be forced to cut fuel excise of 44 cents a litre to help keep cost of living pressures down in the run-up to the May election.
But Mr Frydenberg was not going to get into the "rule-in, rule-out game" just a few weeks out from the March 29 budget.
"That money goes to transport infrastructure and that is important in all our cities and all our regional towns," the treasurer said.
Reserve Bank of Australia governor Philip Lowe has warned inflation could hit at least four per cent this year due to rising global oil and commodity prices as a result of the war in the Ukraine, and rising food prices locally due to the floods on Australia's east coast.
But he is yet to be convinced these price pressures will remain and believes "sustainable inflation" can only be assured if wage growth accelerates to three per cent.
Current wage growth at 2.3 per cent, as measured by the wage price index, is still only where it was prior to the COVID-19 pandemic.
"There are certainly pay rises that are much larger than three per cent taking place for some jobs, but the evidence is that most working Australians are still experiencing base wage increases of no more than 2-point-something per cent," the governor told a business conference on Wednesday.
Even so, Dr Lowe believes a rise in the cash rate from its record low 0.1 per cent is plausible later this year, which would be the first increase in over decade.
He concedes there are risks to the economy by delaying a rise in interest rates at a time when inflation is accelerating.
But he says there is also a risk of moving too early.
"Australia has the opportunity to secure a lower rate of unemployment than has been the case for some decades," Dr Lowe said.
"Moving too early could put this at risk."
The RBA and Treasury are forecasting the unemployment rate to fall below four per cent later this year and remain there in 2023, at a level not seen in almost half a century.
"If we reach this milestone, it would be a significant achievement," Dr Lowe says.
The jobless rate currently sits at a 13-year low of 4.2 per cent.
The Australian Bureau of Statistics will release its latest payroll jobs report on Thursday, which may give some clues as to what progress is being made on the RBA's aim. It comes ahead of the full labour force figures for February next week.
The payroll jobs report will cover the fortnight to February 12.
Economists' predictions for the first rate rise from 0.1 per cent to 0.25 per cent largely range from the June RBA board meeting and the one in August, with key markers being the next two quarterly inflation reports on April 27 and July 27.