Angus Taylor calls for fuel excise cut as Albanese rejects reduction
Updated ,first published
Opposition Leader Angus Taylor has demanded the government cut the cost of fuel by 26 cents per litre, while Prime Minister Anthony Albanese has left the door open to cutting fuel taxes as he steps up efforts to calm public panic over shortages at petrol stations.
Taylor announced on Friday a plan to halve the 52 cents per liter levy over three months; This will save drivers a total of $1.5 billion in three months.
The average national price of regular unleaded oil reached a record high of $2.38 last week.
Taylor said the consumption tax cut was needed to help Australians cope with the rising cost of living and should be paid for by cutting the government’s tax rebates for electric vehicles and pausing the popular rebate scheme for household batteries.
Prime Minister Anthony Albanese, holding a sudden press conference alongside Energy Minister Chris Bowen, said he would only act within budget constraints, which are under intense pressure from rising inflation, and said programs to make electric vehicles and batteries cheaper were helping to ease cost-of-living pressures.
He criticized Taylor’s political approach but did not disparage his policy move to reduce the excise tax.
“I don’t think there is anyone today who buys an electric vehicle and regrets their decision at this point,” Albanese said.
The coalition believes the excise tax cut, costing $1.5 billion over three months, will only increase demand by a small amount, as prices at the pump will fall by only 10 percent.
In economic terms, demand for oil is generally “price inelastic.” This means that a change in price has traditionally had a muted impact on drivers’ demand.
But over the past four weeks, prices have soared to record levels while demand has also skyrocketed.
But independent economist Saul Eslake said cutting the oil tax would increase the chances of the Central Bank raising interest rates even higher.
“The Central Bank is on high alert for anything that could increase inflationary pressure on the economy,” Eslake said.
“The Central Bank is more likely to take what the coalition can give.”
Eslake said if the government was considering any cost-of-living aid in the upcoming budget, it needed to be aware that the RBA, which has raised interest rates in its last two meetings, could raise interest rates.
After a week of pressure from the states, the Coalition and some within the Labor Party to hold a press conference and address the fuel crisis, Albanese confirmed that six tankers of jet fuel, mostly from China, would arrive between now and April 8 as the government said it had brought in more supply than usual.
“This war is having an impact on Australians as well, it’s like it’s having a worldwide impact. You can’t take it away. What you can do is respond in an appropriate, orderly, adult way,” Albanese said alongside Bowen in Parliament House’s blue room reserved for important announcements.
“We understand that this creates [pressures] for small businesses, for farmers, for the Australian people.”
Ahead of a national cabinet meeting on Monday where state and federal leaders are expected to discuss fuel-saving measures, Albanese said: “One of the lessons of the COVID pandemic is that we, as a nation, have made a number of decisions that could have been made better if they had been properly considered.”
Bowen said Australia’s fuel supply remained secure for the next month and that he had had many positive discussions with Asian countries, including Malaysia, which supply significant amounts of Australia’s petrol and diesel.
Malaysia announced last night that it allowed Iranian oil tankers to pass through the blockade in the Strait of Hormuz, where 20 percent of the world’s fuel is exported.
The Middle East’s gas supply to Asia is also being choked by the Iran war.
Asked if he wanted a deal to guarantee Australia’s gas supplies to Malaysia in exchange for the Asian nation’s fuel exports, Albanese said the country’s gas exports were “very important” to Asia.
“Australia is a reliable supplier. We expect reciprocity in our economic relations.”
Bowen said he was “very, very pleased” with his regular talks with Malaysia.
“[The] “The Malaysian government has told me that they see their role as Australia’s reliable fuel supplier as extremely important, that they see Australia as an important ally and friend, and that they will continue to work with us,” he said.
As the Iran war enters its fourth week, panic buying has caused demand from drivers, farmers and other fuel users to double.
Asian refineries, which supply about 80 per cent of Australia’s fuel, could run out of crude oil stocks within a month and it remains unclear how potential shortfalls can be filled.
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EXPLANATION
An earlier version of this story stated that Prime Minister Anthony Albanese had ruled out a fuel tax cut. It has since been updated to clarify that although he disagrees with Angus Taylor’s proposal and how it would be funded, he has not ruled out the fuel excise cut entirely.
Mike Foley is the climate and energy correspondent for The Age and The Sydney Morning Herald.Connect via email.
Paul Sakkal is the Chief Political Correspondent. He has previously covered Victorian politics and won the Walkley award as well as the 2025 Press Gallery Journalist of the Year award. Contact him securely on Signal @paulsakkal.14.Connect with: X or email.
Brittany Busch is the federal politics correspondent for The Age and the Sydney Morning Herald.Connect via email.
Shane Wright is senior economic correspondent for The Age and The Sydney Morning Herald.Connect with: X or email.
