Prime Minister Anthony Albanese has confirmed that Australia's fuel excise cut will be extended for another month, although at a lower rate. The reduction, currently set at 32 cents per litre at the bowser, will be halved to 16 cents a litre from July 1 and carried into August, with the relief gradually wound back. The Prime Minister has also left the door open to further fuel relief.
The extension comes as the government responds to growing uncertainty around fuel supplies. Albanese will convene a virtual meeting of National Cabinet to discuss fuel security, with the status of the Strait of Hormuz unclear after Iran said the waterway was closed again. It is the sixth time National Cabinet has met since the Iran war began, underlining the ongoing concern about access to fuel and its cost.
The government has stated that the cost of the relief, about 3 billion dollars in total, has to be offset by savings elsewhere in the budget. The latest month-long extension accounts for around half a billion dollars on top of about 2.5 billion dollars already committed, making the measure a significant call on public finances.
Because the saving at the bowser is co-funded by the federal and state governments, the extension also requires cooperation from the states. About 26 per cent of the saving comes from the federal government, and indications from Queensland, Victoria and New South Wales are that they will support the move to extend the cut.
Alongside the changes to the fuel excise, the heavy vehicle road user charge, which had previously been scrapped, is now being reintroduced at a reduced rate of 16 cents. The decision has drawn a reaction from the freight sector, with the National Road Transport Association calling on the federal government to waive the heavy vehicle road user charge for the rest of the year.
Industry figures argue that the charge adds to costs for transport operators at a difficult time, and they want certainty beyond the current arrangements. The government, for its part, has framed the package as targeted, temporary relief that has to be balanced against the need to repair the budget.
With the Strait of Hormuz situation still unresolved and the price of fuel a sensitive issue for households and businesses alike, the combination of the National Cabinet meeting and the extended excise cut signals that fuel security will remain high on the government's agenda in the weeks ahead.