The government of Australia on Monday announced temporary measures to reduce fuel costs as global oil prices surge following the war involving Iran.
Prime Minister Anthony Albanese said the government will halve the fuel excise on petrol and diesel and remove the heavy road user charge for three months to help households cope with rising living costs.
The tax cut will reduce fuel prices by about 26.3 Australian cents per litre, while the package is expected to cost the government around A$2.55 billion ($1.75 billion), according to Treasurer Jim Chalmers.
Global oil prices have surged after supply disruptions linked to the war, which has affected shipments through the Strait of Hormuz, a key route that previously carried about one-fifth of the world’s oil.
Benchmark Brent crude prices have risen sharply, climbing about 59% in March and reaching $115.66 per barrel when markets opened on Monday.
Energy Minister Chris Bowen said the government has also adopted new fuel security powers to support the purchase of spot cargoes through Export Finance Australia to help smaller suppliers manage the high costs.
The government added that Australia is currently operating under level two of its national fuel security framework, aimed at keeping transport and economic activity running smoothly.
Officials warned that while supply remains stable in the near term, the longer the conflict continues, the greater the potential impact on global energy markets and domestic fuel prices.
Government data shows the country currently holds about 30 days of diesel and jet fuel supplies and 39 days of petrol, below the 90-day level recommended by the International Energy Agency.