Australia reduces fuel excise tax by 50%, providing A$2.55 billion in support to citizens.
The Australian government has decided to halve the excise tax on gasoline and diesel for three months to cool down fuel prices, with an estimated total support budget of AUD 2.55 billion.
The Australian government has just announced an emergency package of measures to ease the pressure of living costs amid rising energy prices. Accordingly, the excise tax on petrol and diesel will be reduced by 50% for three months, resulting in a drop in fuel prices at the tap of approximately 26.3 Australian cents per litre.
Large-scale budget support package
Prime Minister Anthony Albanese confirmed that, in addition to tax reductions, road usage fees for heavy trucks will also be temporarily waived to support the transport sector. Finance Minister Jim Chalmers estimated the total cost of these measures at approximately AUD 2.55 billion (equivalent to USD 1.75 billion).
Notably, this decision comes as retail fuel prices in Australia have reached record highs. According to a report from the Australian Petroleum Institute on March 29, diesel prices have exceeded AUD 3/litre, while petrol prices remain around AUD 2.50/litre.
Pressure from the global oil market
The volatility in Australia is occurring against the backdrop of a global energy market heavily impacted by the conflict involving Iran. The Strait of Hormuz, through which approximately 20% of the world's oil flows, is facing the risk of supply disruptions.
Market data shows that Brent crude oil prices rose 59% in March 2026, marking the strongest monthly increase in history. At the opening of trading on March 30, the price of this type of oil stood at $115.66 per barrel.
National energy security strategy
To stabilize the market, the Australian government has activated its national fuel security plan with four levels of response. Prime Minister Anthony Albanese said the country is currently at level two, prioritizing maintaining normal economic activity rather than tightening supply.
Although Australia's fuel reserves are at their highest level in 15 years, the actual figures are still lower than the International Energy Agency's (IEA) 90-day recommendation. Specifically:
- Gasoline:Enough supplies for approximately 39 days.
- Diesel fuel and aviation fuel:Enough stock for about 30 days.
Emergency import guarantee mechanism
To ensure short-term supply, the government has amended legislation to allow Export Finance Australia to provide financing guarantees for spot fuel shipments. Energy Minister Chris Bowen explained that the guarantees will help small businesses mitigate financial risks when importing goods with rising input costs, thereby ensuring liquidity for the domestic market.
