To Curb Global Oil Price Surge, Australia Cuts Fuel Tax by 50 Percent
The Australian government has taken swift action to mitigate the impact of the global oil price surge. Prime Minister Anthony Albanese announced a reduction in fuel excise duties by up to 50 percent for three months starting from 1 April 2026.
This policy comes amid mounting pressure from skyrocketing energy prices due to the conflict in the Middle East. The war involving the United States (US), Israel, and Iran has disrupted global supply chains for nearly five weeks.
In his statement in Canberra, Albanese said the excise cut on petrol and diesel would apply until 30 June 2026. This step is estimated to lower prices by around 26.3 Australian cents per litre.
The policy offers substantial savings. For a full tank of 65 litres, the public could save nearly 19 Australian dollars.
“We understand that the cost-of-living pressures facing the community are very real,” Albanese said, quoted from Morocco World News on Tuesday, 31 March 2026.
He added that the Australian government wants to be better prepared to face the ongoing impacts of the global conflict now being felt domestically.
In addition to cutting fuel taxes, the Australian government has also suspended road user charges for heavy vehicles during the same period to reduce logistics and distribution costs. This action is taken alongside the surge in global crude oil prices.
Citing Business Insider, the May Brent crude contract rose about 1 percent to US$114, or approximately Rp1.93 million per barrel. The West Texas Intermediate (WTI) crude price also surged by 2.5 percent to US$102, or about Rp1.73 million per barrel.
As a country that imports around 80 percent of its refined fuel needs, Australia is highly vulnerable to global energy crises. This situation has caused domestic fuel prices to spike sharply as global energy prices explode.
Peter Khoury from the National Roads and Motorists’ Association assessed that the recent fuel price increases over the past few weeks could erode the benefits of the tax cut. He emphasised that the surge is more driven by global factors than domestic policies.
He noted that transportation costs for essentials would remain high due to dependence on such fuels.
Competition authority data shows that fuel prices in Australia’s five largest cities surged in the week up to 25 March, with diesel rising 10 percent and petrol increasing 8 percent.