Government Halves Fuel Excise as Iran War Drives Prices to Record Highs

The federal government has announced a temporary halving of the fuel excise on petrol and diesel, cutting prices by 26.3 cents per litre for the next three months as Australians grapple with soaring fuel costs triggered by the war in Iran. The heavy vehicle road user charge will also be reduced to zero over the same period to help truck drivers absorb the global fuel shock.

The measures, costing taxpayers $2.55 billion, will take effect from April 1 and are expected to shave around $19 off the price of filling a standard 65‑litre tank. “We’re making fuel cheaper today because we understand that Australians are under serious pressure,” Prime Minister Anthony Albanese said.

The announcement followed a meeting of national cabinet, where state and territory leaders agreed to a four‑point action plan for a coordinated response to the fuel crisis. Australia has already moved to the second stage of escalation “keep Australia moving” after passing the initial “plan and prepare” phase. The next stages include “taking targeted action” and “protecting critical services.”

Albanese also called for “more certainty” from US President Donald Trump regarding the objectives of the conflict in Iran, warning that global economic stability depends on de‑escalation. “A de‑escalation is in the global economy’s interests,” he said.

Treasurer Jim Chalmers said the excise cut is expected to reduce headline inflation by half a percentage point through to the June quarter of 2026. But he warned the Middle East conflict is inflicting deep economic pain. “Australians are paying a hefty price,” he said. “From an economic point of view, the war in the Middle East could not end soon enough.”