Albanese government extends petrol and diesel discount for July
Fuel price cuts will be extended for another month beyond the original deadline of June 30, but the July discount will only be worth half as much as it has been since April.
On Sunday, the Albanian government will announce a cut in fuel tax by 16 cents per liter starting July 1, which will also cut gasoline and diesel prices by the same amount.
The special consumption tax reduction of 32 cents per liter began in April in response to fuel prices, which reached record levels in March after Iran closed the Strait of Hormuz on February 28, blocking approximately 15 percent of global oil supply.
The heavy vehicle road user charge of 32 cents per liter has been abolished for three months. There will also be a 16¢ discount in July.
The phased reduction in fuel consumption discounts is designed to avoid a new round of panic buying as drivers stock up on cheap fuel in the final weeks before price cuts end.
Record demand for gasoline and diesel in the weeks after the start of the war in the Middle East caused widespread panic and nearly 600 service stations ran out of at least one type of fuel. There were no fuel shortages in Australia, but the supply chain collapsed under the pressure.
“The reduced fuel tax rebate will also help manage demand at service stations towards the end of the month,” the federal government said in a statement.
Fuel prices are well below their peak in March, when unleaded petrol prices exceeded $2.50 a liter in Sydney and Melbourne and $3 for diesel.
The average price of unleaded petrol in Sydney and Melbourne is about $1.60 per litre, including a 32 cents discount. This is almost the same week as before the Iran war started.
Diesel sells for $2 a liter; this is slightly above the pre-war price of $1.80.
Prime Minister Anthony Albanese said the 16 cents per liter cut would reduce the cost of a 65-litre fuel tank by around $11.
“Today’s decision recognizes that despite the welcome and significant decline in oil prices recently, we know people are still under pressure,” Albanese said.
Forecasters expect fuel prices to continue falling as confidence in the market increases after the United States and Iran signed a ceasefire agreement on Wednesday.
The international benchmark Brent crude oil is at 78 dollars a barrel. This is about 7 percent higher than the pre-war price of oil, but well below the peaks of the previous weeks and months.
The new reduction in heavy vehicle fees and fuel consumption tax in July is expected to cause a loss of $400 million in revenue to the budget. The three-month, 32-cent cut is estimated to cost $2.5 billion.
Cut through the noise of federal politics with news, views and expert analysis. Subscribers can sign up for our weekly Inside Politics newsletter.
Mike Foley is the climate and energy correspondent for The Age and The Sydney Morning Herald.Connect via email.
