Everything you need to know about Australia fuel crisis response after national cabinet meeting
Prime Minister Anthony Albanese has announced that the Australian government will halve fuel duty, reducing petrol prices by 26 cents per litre, as the government steps up its response to the global oil shock and rising domestic costs.
Federal, state and territory leaders met at an emergency national cabinet meeting on Monday to agree a national fuel security plan.
The war has put pressure on global oil supplies and more than four weeks into the conflict, governments around the world are being forced to step up their response.
International Energy Agency President Fatih Birol described the fuel crisis as worse than the combined effects of the three biggest energy shocks in modern history.
The Prime Minister said on Monday: “Whilst Australia’s fuel supply outlook remains secure in the near term, we also need to be very clear with Australians that the longer this war drags on, the worse the impacts will be.
“I and the government understand that people are really worried, but we have a plan to get through this.”
What was announced today?
The federal government announced three key measures on Monday: halving fuel duty for three months, eliminating the heavy vehicle road user charge for three months and creating a national fuel safety plan.
Fuel duty, which stands at 52.6 cents per liter on petrol and diesel, will be halved for three months from Wednesday, reducing the cost on the bowser by 26 cents per liter.
Albanese said the heavy vehicle road user charge of approximately 32 cents per liter had also been cut for three months “to help truckers continue their vital work for our nation”.
“We’re making fuel cheaper today because we understand Australians are under significant pressure,” Albanese said.
“We also want to encourage Australians who can use public transport to help save fuel for areas and industries that need it.”
Finance Minister Jim Chalmers said the cuts would cost the budget an estimated $2.55 billion and a “cut in inflation of around half a percentage point over the year to the June quarter 2026” was expected.
What is the national fuel security plan?
The fuel security plan, adopted by all state, territory and federal government, lays out the national response to the global energy shock in four phases.
The first stage is called “plan and prepare.” Australia has already passed this initial level where fuel supplies continue as normal. During this phase, the government works with fuel suppliers and distributors to gather supply chain information, such as creating a fuel supply coordinator at the first national cabinet meeting following the outbreak of the war in Iran.
Albanese said Australia was in the second phase of “keeping Australia moving”, where there were local disruptions to fuel supplies. At this stage, the government will take precautionary measures to support fuel supplies, such as negotiating with Australia’s Indo-Pacific neighbors to strengthen the country’s reputation as a reliable gas exporter in exchange for oil.
Drivers will be asked to buy only the fuel they need but will not be asked to reduce their normal consumption.
The third phase, “taking targeted action”, will involve looking at ways to reduce Australians’ fuel consumption, including through voluntary lifestyle changes such as working from home. The plan states that the government will also consider releasing more of the country’s oil reserves.
At level four, “protecting critical services for all Australians”, the government will prioritize fuel for certain sectors and ensure the economy continues to operate.
NSW Premier Chris Minns confirmed on Friday that level four would include rationing and diesel shortages would be closely monitored.
The plan says governments at all levels will work together on “stronger demand measures, ensuring fuel is available for critical users such as life support services, utilities or emergency services.”
How did we get here?
The USA and Israel attacked Iran on February 28 and killed Iran’s religious leader Ayatollah Ali Khamenei. Iran retaliated by striking U.S. military bases and embassies in neighboring countries along the Gulf and effectively closing the Strait of Hormuz, a narrow shipping corridor through which about 20 percent of the world’s oil passes.
Iran’s pressure on this street caused oil prices to rise to $112 per barrel over the weekend. Before the war it was $70 per barrel.
This cost is passed on to the consumer at the gas pump. The average diesel price in Australia’s major cities reached $3.03 per liter last week; that’s up more than 61 cents in two weeks. Gasoline prices also reached a record level with an average of $2.38 per liter.
Energy Minister Chris Bowen said last week that more than 600 gas stations were out of at least one type of fuel and that demand for fuel had more than doubled in some areas amid fears that the oil supply chain would be disrupted. Fuel theft also increased.
The government has assured Australians that the oil shipment has reached land as planned and six canceled oil tankers have been replaced. But the industry alarm sounded The country’s fuel stocks are heading towards the abyss at the end of April.
The deployment of thousands of American troops and Iran’s warning that they would be “fired on” if they put their boots on the ground did nothing to ease fears that the conflict would continue.
There is war Labor Party’s critical budget preparations have been disrupted In May, the situation was widely seen as an opportunity for the government to introduce tax reforms, and state governments called on the prime minister to lead a national response to prevent a repeat of his fragmented COVID-19 pandemic strategy.
What measures have already been taken?
Emergency laws were rushed through parliament on Monday to boost Australia’s fuel stocks, giving importers unprecedented government support to scour the world for increasingly rare and expensive shipments of petrol, diesel, crude oil and fertilizer.
The program is designed to send a signal to importers to buy whatever resource they can and bring it to Australia without worrying about incurring a loss.
This is the Albanian government’s latest attempt to take control of the developing crisis after it released the following information: 20 percent of Australia’s fuel reserves To increase domestic supply, about two weeks after the conflict began.
Brittany Busch is the federal politics correspondent for The Age and the Sydney Morning Herald.Connect via email.
