The Albanese government says motorists should operate on the assumption the temporary 32¢-per-litre fuel tax reduction will not extend beyond June, while insisting the final decision will be left as late as possible.
Figures provided by the government show that petrol and diesel prices are vastly cheaper now than they were in the early weeks of the war against Iran, and would still be relatively low if the excise cut were ended.
For example, on March 31, a month after the US and Israel waged war, claiming it would last only six weeks, the price of unleaded petrol in Sydney reached $2.57 per litre. Today, it is $1.65, meaning the price would rise to around $2.00 if the excise cut were not renewed.
Similarly, the price of diesel hit $3.21 a litre in Sydney and is $1.98 at the moment. It is a similar story in all other capitals.
The 32¢ reduction comprised a fuel excise cut of about 26¢ per litre plus a rebate of around 5.7¢ per litre for the extra GST made from the price spike.
Combined with reducing the heavy vehicle road user charge to zero to assist the nation’s vital trucking fleet, the total cost to the budget was $2.9 billion, or almost $1 billion a month.
With no end in sight to the war against Iran, and tensions once more ratcheting up, Transport Minister Catherine King cautioned motorists to brace for a sharp rise in petrol prices at the end of this month because the government had yet to sign off on a further extension to the halving of fuel excise, and may not do so.
“The fuel excise reduction finishes in June. The road user charge reduction does as well. We’re consulting, obviously, with industry about the impact of that, but people should at this stage expect that it’s coming off at the end of June,” she said.
She left open ongoing assistance for the trucking industry.
The fuel hike not only caused hardship at the bowser; it worsened what was already an inflation crisis before the war began.
As the US and Iran resumed hostilities this week, Prime Minister Anthony Albanese warned the economic impact would continue to worsen.
Asked how this was affecting decision-making on any extension of the excise cut, he said, “We’ll make the assessment.”
“This is a volatile global environment. The government has done our best and I think we’ve achieved better than most considered. I mean, the opposition was saying there would definitely be rationing at Easter or just after Easter. We’re now into June.
“We have more fuel in Australia today than we had on February 28, and that’s a direct result of the relationships that we’ve built, but also the structures that we’ve put in place as well.”
One government source, who asked to speak anonymously, said the assessment would be made as late as possible, given the ongoing volatility in the region.
Extracted in full from: https://www.afr.com/politics/federal/motorists-should-brace-for-end-of-fuel-tax-cut-says-minister-20260610-p605e4
