Millions of Australian motorists and transport businesses are facing a major cost-of-living blow as the Albanese government signals it will not extend a fuel tax cut that has been slashing 26 cents off the price of a litre — as the Iran-US conflict threatens to push global oil prices even higher.
Transport Minister Catherine King told ABC News Breakfast on Wednesday that Australians should expect the temporary halving of the fuel excise to expire at the end of June as planned, rather than be extended. “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. “We are doing everything we can to shield Australians from this conflict in the Middle East.”
The $2.5 billion measure was introduced by the government in response to soaring global oil prices triggered by escalating Middle East hostilities. Its removal will land at a particularly sensitive moment. The US military has begun launching what it describes as “self-defence” strikes against Iran following the downing of an American Apache helicopter, with President Donald Trump saying the United States “must respond.” Oil prices have already surged toward $100 a barrel as the conflict disrupts supply through the Strait of Hormuz, the critical waterway through which approximately 20 per cent of global oil trade passes.
King said Australia’s most senior ministers, including Prime Minister Anthony Albanese, had been working “incredibly hard” to secure the country’s fuel supply by strengthening relationships with partner nations. She called on all parties to pursue diplomatic solutions. “We want to urge all parties to continue to negotiate. This is a pretty fragile ceasefire, and you’re seeing that borne out unfortunately,” she said.
In response to the supply threats, the government has introduced a $10 billion energy and fertiliser security package. Australia’s onshore fuel reserves will be expanded to at least 50 days, a permanent government-owned fuel reserve of approximately one billion litres will be established, and minimum stock-holding obligations for suppliers will be increased by around ten days for every fuel type.
The expiry of the fuel excise cut will add immediate pressure to household budgets and freight costs at a time when the global energy market is already under severe strain — with no clear resolution to the Middle East conflict in sight.
