Canberra, Australia. Australian Prime Minister Anthony Albanese said the government will halve the excise on fuel and diesel and remove the heavy road user charge for three months to help households manage rising costs driven by the Iran war.
Fuel tax cut and fiscal cost
Albanese said halving the tax would reduce the cost of fuel by 26.3 Australian cents per litre. Treasurer Jim Chalmers said the measures would cost the government about A$2.55 billion ($1.75 billion), speaking at a joint press conference with Albanese and Energy Minister Chris Bowen.
Oil market disruption and price surge
Some 20% of the world’s oil was transported through the Strait of Hormuz before the U.S.-Israel war against Iran choked off supplies. Brent crude has surged 59% in March, the steepest monthly gain in history, and was at $115.66 per barrel when markets opened on Monday.
Previous fuel security measures
The new measures follow earlier actions by Canberra since the war began on February 28, including releasing petrol and diesel from domestic reserves and temporarily relaxing fuel quality standards.
Domestic fuel prices and government response
The average retail price of diesel rose to more than A$3 a litre in Australia last week and petrol to A$2.50, according to a March 29 report from the Australian Petroleum Institute. Albanese said the government recognised the pressures on households as the effects of the war were being felt in Australia.
National fuel security plan and escalation levels
The government confirmed it has adopted a national fuel security plan, with all state governments agreeing to work together to deliver fuel to regional areas where it is needed most. Albanese said Australia was at level two of four action levels, aimed at keeping the country moving, and said the highest level would be to ensure critical services were maintained. He said Australia’s fuel supply outlook remained secure in the near term but warned impacts would worsen the longer the war continues.
How will the fuel excise cut affect your household budget over the next three months?
