Anthony Albanese has unveiled the government’s response to Australia’s soaring fuel prices and supply issues, including a temporary tax cut aimed at lowering prices at the bowser.
The Prime Minister confirmed the government will halve the fuel excise for three months from Wednesday, a move expected to cut petrol and diesel prices by 26.3 cents per litre.
Truck drivers will also receive relief, with the heavy vehicle road user charge scrapped for three months, while a planned increase has been delayed.
The measures were agreed at a National Cabinet meeting, as leaders scramble to respond to surging prices and patchy supply triggered by the escalating conflict in the Middle East.
‘While Australia’s fuel supply outlook remains secure in the near term, we need to be very clear with Australians that the longer this war goes on, the worse the impacts will be,’ Albanese said.
‘The government understands that people are really worried, and we know the cost pressures are very real as the impact of the war on the other side of the world plays out right here.’
Albanese urged Australians to cut back on fuel use, particularly for non-essential trips, and take public transport instead.
‘We really also want to encourage Australians who can to take public transport to help save fuel for the areas and industries that need it,’ he said, noting that some jurisdictions have already taken steps to reduce public transport fares.
Treasurer Jim Chalmers said the changes were temporary and targeted.
‘What we’re announcing today will reduce the cost of a 65-litre tank by about $19. So it is a substantial cost-of-living relief. It is timely, it is temporary, and it is responsible,’ Dr Chalmers said.
‘The cost of what we are announcing today is $2.55 billion, depending, of course, on the amount of demand in the system over that three-month period.
‘But the initial costing is $2.55 billion, and the revenue foregone by delaying the increase in the heavy vehicle road user charge is about another $53 million.’
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Alongside the immediate cost-of-living relief, Albanese revealed a new National Fuel Security Plan, agreed with states and territories, designed to coordinate the country’s response and avoid a fragmented approach.
‘We’ve been working over recent days, but right over the weekend, to make sure that we’re able to deliver a consistent plan, one plan, not nine, across eight state and territory jurisdictions and from the Commonwealth,’ he said.
The plan outlines four escalating levels of action, depending on how the crisis unfolds.
The first stage, plan and prepare, applies when supply is operating normally, a phase Albanese made clear Australia has already moved beyond.
‘This is where fuel supply operates as normal, with governments monitoring the impacts of global factors – clearly, we’re beyond that,’ Albanese said.
The country is now in the second stage, keeping Australia moving, where supply is still functioning but localised shortages are emerging.
‘Fuel supply continues to operate effectively, but localised supply disruptions occur – that is where we are at the moment,’ he said.
If conditions worsen, the government could shift to targeted action under level three, prioritising fuel for critical areas and encouraging Australians to cut back on usage.
‘All Governments will look for practical measures to help you reduce your use,’ the plan said.
‘All Australians are in this together, and we will need to play our part to help fuel get to where it’s needed most.
‘Governments will act to secure supply. Clear guidance will be provided on how you can help make sure fuel gets to where it’s needed most.’
The most severe stage, protecting critical services, would involve direct government intervention to ensure essential industries and services continue operating.
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‘Ongoing supply disruptions would require government action to ensure critical users are protected and the economy remains open and operating,’ Albanese said.
The plan said: ‘There will be a nationally consistent framework to support the allocation of fuel, with clear conditions for when the measures can be relaxed.’
Bowen introduced emergency legislation to parliament to boost fuel stocks, stating the crisis served as a reminder that Australia was not immune from the impacts of war.
‘The risk premium for purchasing discretionary cargoes is rising,’ he told parliament.
‘Work to scope deals and secure additional fuel is already under way.’
‘That’s why today’s bill is so urgent. This bill creates a strategic reserve to secure the supply of strategic materials that are vital for Australia’s economy.’
The laws are expected to pass the lower house with bipartisan support on Monday and be debated in the Senate on Tuesday.
Australia’s fuel stocks remain at normal levels, but fears of future shortages and price spikes caused by the ongoing blockage of the Strait of Hormuz have spurred users to bulk-buy petrol and diesel, leading to localised shortfalls.