Australians will face higher fuel costs starting Monday as the government concludes a temporary discount on the fuel excise tax. Treasurer Jim Chalmers confirmed that the 16-cent-per-litre reduction, which was extended last month, will end at midnight on Sunday, August 2.
"That fuel excise relief will end midnight on Sunday and that's because it has played a really important role helping to take some of the sting out of these cost-of-living pressures," Chalmers stated. "It was never the government's intention for that to be permanent."
The Labor government initially halved the fuel excise for three months starting in April, a measure that saved drivers 32 cents per litre in response to escalating prices attributed to the conflict between the U.S. and Iran. The discount was extended in July but reduced to 16 cents per litre.
Despite fresh tensions between the U.S. and Iran causing Brent crude oil prices to exceed $100 a barrel, the government has ruled out further relief. Warnings suggest that petrol prices could surpass $2 per litre as the excise discount is phased out.
Average unleaded petrol prices have already risen to over $1.80 per litre in all state capitals, a notable increase from approximately $1.50 at the close of June. This rise in oil prices coincides with attacks by Iran-aligned Houthi militants on Saudi oil installations and Iran's attempts to disrupt shipments through the Strait of Hormuz. U.S. strikes have resumed in response to Iranian attacks on vessels in the strait, a critical route for oil transit.
Prime Minister Anthony Albanese commented on the broader economic impact, stating, "The war is having an impact here in Australia and the longer it goes, the bigger the impact will be." He added, "This is a war on the other side of the world. We are not protagonists in it, but we are impacted by it and we've consistently called for a de-escalation."