Motorists to face volatile fuel prices as US-Iran war ramps up and temporary cut to fuel taxes winds up
Motorists are being told to brace for rising fuel prices as the US-led war on Iran escalates and experts warn the broader economic impacts will be extensive.
Higher prices at the bowser will continue to flow to motorists as the war on Iran drags on and the federal government’s temporary cut to fuel taxes winds up.
The scaled-back extension of the fuel excise reduction of 16 cents per litre for petrol and diesel will apply until August 2.
It is unlikely the discount will be extended.
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By continuing you agree to our Terms and Privacy Policy.The fragile pause to hostilities between the US and Iran has unravelled as US President Donald Trump threatened a “massive attack” on Tehran, which he said had not “received enough pain”.
Intensifying conflict had caused petrol prices to jump in Australia by three cents overnight, with the average for unleaded $1.85, NRMA spokesman Peter Khoury said.
Diesel had also jumped by up to five cents, with the average cost $2.26.
“We’re seeing prices start to head north, and wholesale prices have also gone up,” he told AAP.
“That’s going up about 10 cents this week, so those increases are likely to flow on.”
Mr Khoury said the government had secured Australia’s fuel supply, but that would not impact the high prices motorists were likely to face.
“Unfortunately, until the war ends in the Middle East and they have reopened the Strait of Hormuz, price is going to continue to be volatile,” he said.
With so much of Australian industry - including mining, agriculture and transport - run on diesel, the broader economic impact would be “extensive”, Mr Khoury said.
Australia sources most of its imported fuel from regional Asian markets, which prompted Prime Minister Anthony Albanese to travel earlier this year to key partners such as Singapore to shore up the nation’s supply.
As shipping in the Strait of Hormuz remains disrupted, another choke point could emerge in the Red Sea after Iran-backed Houthi rebels claimed they struck two tankers in the key trading route.
An escalation could pose a further threat to global energy supplies and price hikes.
Experts have pointed to an alarming shortage of refined fuel such as petrol and diesel, which could sting the global economy.
The government continued to review its policy settings to help manage hip pocket pain for motorists, Treasurer Jim Chalmers said.
“We extended our cut to the fuel tax for another month to help take the sting out of petrol prices for Australian motorists and businesses,” Dr Chalmers said.
“This extra month of fuel tax discount is helping Australian motorists and businesses with the cost of living as this support tapers off.”
