Casablanca – Australia will halve its fuel excise for three months from April 1, as Prime Minister Anthony Albanese moves to ease pressure from surging global oil prices linked to the US-Israel war on Iran.
Speaking in Canberra on Monday, Albanese said the excise on petrol and diesel would be cut by 50% until June 30, lowering prices by 26.3 Australian cents per liter. For motorists filling a 65-liter tank, that would mean savings of nearly A$19. The government will also suspend its road user charge on heavy vehicles for the same three-month period.
The move comes as Brent crude climbed above $116 a barrel, its highest level in almost two weeks, with the conflict in the Middle East continuing to disrupt global supply chains. Australia imports about 80% of its refined fuel, leaving local prices highly exposed to international shocks.
“We understand the cost pressures for people are very real,” Albanese said, adding that the government wanted to be “over-prepared” as the effects of the war were now being felt in Australia.
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Still, some industry voices have questioned how much relief drivers would actually notice.
Peter Khoury of the National Roads and Motorists’ Association told Al Jazeera that petrol prices had already jumped by about 33 cents per liter in the past two weeks alone, which could quickly swallow the benefit of the tax cut. He argued that global oil prices, not taxes, were the main reason costs had spiked.
“The Australian economy runs on diesel,” Khoury said, warning that transport costs for food and essential services would remain under pressure because heavy vehicles depend almost entirely on diesel. He also pointed to a similar tax cut Australia introduced after Russia’s 2022 invasion of Ukraine, saying it was barely felt at the pump.
Fuel prices in Australia’s five largest cities rose sharply in the week to March 25, with diesel up 10% and petrol up 8%, according to the competition watchdog.
More than 500 service stations have recently run out of at least one fuel type due to panic buying, though Energy Minister Chris Bowen said emergency stockpiles remain secure, including 39 days of petrol and about 30 days each of diesel and jet fuel.
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