Australia to halve fuel tax as global energy crisis deepens

Australian Prime Minister Anthony Albanese made the announcement on Monday as the international benchmark for crude oil rose above $116 a barrel, its highest level in nearly two weeks, amid escalation on multiple fronts of the conflict.

Speaking at a news conference in Canberra, Albanese said the fuel excise would be cut in half from April 1 to June 30 in recognition of the “financial stress” caused by rising energy prices.

Albanese said the move would reduce the cost of petrol by 26.3 Australian cents ($.18) per litre, saving motorists nearly $19 ($13) on a 65-litre (17-gallon) tank of fuel.

“We understand the cost pressures for people are very real as the impact of the war on the other side of the world plays out right here,” Albanese said.

“We’re acting now to be over-prepared.”

Albanese said the government would also suspend its charge on heavy vehicles for three months.

While Australia is a major exporter of coal and natural gas, the country sources about 80 percent of its refined fuel needs from overseas.

Average diesel and petrol prices in Australia’s five largest cities rose 10 percent and 8 percent, respectively, in the week to March 25, according to the country’s competition watchdog.

Peter Khoury, a spokesman for the National Roads and Motorists’ Association in Australia, said the tax cut would make little difference as petrol prices had risen about 33 cents ($0.21) per litre in the past two weeks alone.

“It’s not a tax that’s putting up the price, it’s oil prices,” Khoury told Al Jazeera.

“The Australian economy runs on diesel,” Khoury said.

“Most of our foods and services are delivered by heavy vehicles, and they run on diesel.”

Khoury said a similar tax cut after Russia’s full-scale invasion of Ukraine in 2022 was barely felt by motorists at the time.

“I think they are desperate for change, but what we saw last time is [that] it just didn’t register at the bowser,” Khoury said, using an Australian slang term for fuel pump.

Australia has so far refrained from introducing mandatory energy conservation measures, such as fuel rationing and work-from-home arrangements, but officials have urged the public to avoid excessive fuel consumption.

Minister for Energy Chris Bowen last week told parliament that more than 500 service stations had run out of at least one type of fuel due to panic buying across the country.

Bowen said over the weekend that Australia’s energy supply remained secure, with all expected fuel deliveries arriving as scheduled, and that the country had 39 days of petrol in emergency stockpiles, as well as about 30 days each of diesel and jet fuel reserves.