Australia Cuts Fuel Tax to Dampen Price Surge

Australian Prime Minister Anthony Albanese / PHOTO via Instagram @albomp

JAKARTA - The Australian government will temporarily cut fuel taxes by half to address rising prices due to the conflict in the Middle East.

"We will reduce fuel taxes by half for three months so that you can save money when filling (fuel)," said Australian Prime Minister (PM) Anthony Albanese, Monday, March 30, reported by ANTARA from Sputnik.

The policy is expected to reduce fuel prices in Australia by around 26.3 cents Australian dollars (around Rp2,700) per liter for three months starting Wednesday, April 1, 2026, with a budget burden of around 2.55 billion Australian dollars (around Rp42.5 trillion)

In addition, Australia will also adjust the cost of using roads for heavy trucks in the same period to relieve pressure on the transportation and logistics sector.

"We are making fuel cheaper right now because we understand Australians are under serious pressure," Mr Albanese said.

The decision was made after a National Cabinet meeting with state and territory leaders, who agreed to four points of Australia's National Fuel Security Plan.

The Australian government said that it had entered the second phase of the plan, namely by maintaining the smooth running of economic activities. However, Australia still has enough time before moving to stricter policy measures, such as restrictions on fuel distribution.

At the end of February, the United States and Israel launched attacks on targets in Iran, including in Tehran, causing damage and civilian casualties. Iran then retaliated by attacking Israeli territory and American military facilities in the Middle East.

The escalation of the conflict triggered a de facto blockade in the Strait of Hormuz, which is the main route for the shipment of oil and liquefied natural gas from the Gulf region to global markets. The blockade in the Strait of Hormuz has an impact on supplies and has pushed up fuel prices in various countries.