Australia’s opposition has pledged a “fuel price shield” that would automatically halve fuel excise when crude oil prices exceed 100 US dollars a barrel, potentially saving motorists about 27 cents a litre on petrol and diesel.
The Coalition plan, unveiled by Opposition Leader Angus Taylor in Canberra, would apply when the price of crude averaged more than 100 US dollars a barrel for two weeks. The reduction would last for up to three months, while the heavy road user charge would also be suspended.
The policy would cost almost $1 billion a month while in operation, according to the proposal. Mr Taylor said it would be funded by an 80 per cent cut to the tobacco excise, which he claimed would raise $8 billion.
“The cut to tobacco excise will raise $8 billion of funding,” he told reporters outside a petrol station on Sunday. “We worked through that with the Parliamentary Budget Office and that will fully fund the cut to the fuel excise.”
Mr Taylor described the measure as “anti-inflationary”, saying it would reduce pressure on transport costs and help motorists as petrol prices approached three dollars a litre.
Fuel prices have risen across Australia as the price of Brent crude repeatedly breached 100 US dollars during the US-Israel war on Iran. The conflict has led to Tehran effectively closing the Strait of Hormuz, a key shipping route, while attacks on Saudi oil exports have caused further disruption to supplies.
Average petrol prices in state capitals have reached $2.30 a litre or more. The May budget forecast that oil prices would fall back to 80 US dollars by the middle of 2027, although some experts have since predicted they could reach as high as 150 US dollars a barrel as global stockpiles are depleted.
The Australian Government temporarily halved fuel excise in April after hostilities began in the Middle East, cutting about 26 cents a litre from prices at the pump. A reduced discount of 16 cents a litre for petrol and diesel remained in place until August 2.
Treasurer Jim Chalmers dismissed the Coalition proposal as a political response to rising support for One Nation. “What we’ve seen overnight from Angus Taylor is more about polling numbers than petrol prices,” he said on the News24 Sunday Agenda programme.
“He is under very serious political pressure and that matters much more to him than the cost-of-living pressures that people are feeling around the country.”
Labor has not ruled out another temporary cut to fuel excise if international conditions worsen. Energy Minister Chris Bowen is due to travel to Saudi Arabia in the coming days to discuss the flow of oil to refineries around the world.
