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Albanese signals fuel excise cut may be extended to help motorists paying more amid Middle East crisis
TL;DR
Prime Minister Anthony Albanese indicates the government may extend the temporary fuel excise cut to alleviate costs for motorists affected by the ongoing Middle East crisis. He warns that normal global oil trade could take months to resume even after a peace deal is reached.
Key points
- Albanese signals possible extension of fuel excise cut
- Cut aims to help motorists amid Middle East crisis
- Cost to budget from excise cut is $2.55 billion
- Normal global oil trade may take months to resume
- Peace deal between US and Iran announced
Anthony Albanese has signalled the federal government is open to extending the temporary cut to the fuel excise to help cushion motorists from a months-long tail from the Middle East conflict.
The prime minister also welcomed the announcement of a peace deal between the US and Iran to end the war and reopen the strait of Hormuz.
But Albanese cautioned that it would take at least “many months” for global oil trade to return to normal even after the effective blockade of the strait is lifted.
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The government has for weeks been downplaying the prospect of extending the three-month cut to the fuel excise and pause on the heavy vehicle road user charge, which has cost the budget $2.55bn.
The energy minister, Chris Bowen, on Saturday stressed the measure was always intended to be temporary and it “remains the plan” for it to end on 30 June.
But Albanese left the door open to a possible extension on Monday, signalling an announcement in the coming week after deliberations of cabinet’s expenditure review committee.
“We’ll make an assessment over the coming period, and we’ll make an appropriate announcement,” the prime minister told reporters in Canberra.
“We know that the end of the conflict doesn’t mean that we’re back to business as usual, and we know that that [fuel excise cut] has been really important in providing support for people. One of the things that my government has been concerned about is what practical measures we can take on cost-of-living measures.”
The reopening of the strait of the Hormuz – a shipping lane vital to global oil trade – is contingent on the official signing of the peace deal, which mediator Pakistan said would take place in Geneva on Friday.
Australia was among the first countries to endorse the US and Israel’s strikes on Iran in late February as a means of preventing Tehran from acquiring nuclear weapons.
But as the war expanded into regional conflict and the oil crisis worsened, the Albanese government began to urge de-escalation and started to question Donald Trump’s long-term strategy in the Middle East.
The announcement of a peace deal means Australia is likely to avert Treasury’s worst-case scenario for an extended war, which forecast that inflation could surpass 7% in the year through December.
Q&A
What is the current status of the fuel excise cut in Australia?
The Australian government is considering extending the temporary cut to the fuel excise to support motorists amid rising fuel prices.
How much has the fuel excise cut cost the Australian budget?
The temporary fuel excise cut and pause on the heavy vehicle road user charge have cost the Australian budget approximately $2.55 billion.
What impact does the Middle East conflict have on fuel prices in Australia?
The ongoing conflict in the Middle East has contributed to increased fuel prices for Australian motorists, prompting discussions about extending the fuel excise cut.
How long will it take for global oil trade to normalize after the conflict?
Prime Minister Albanese stated that it could take many months for global oil trade to return to normal, even after a peace deal is reached.
