Australia's Government is cutting fuel excise for three months and encouraging people to make more use of public transport. Photo / Getty Images
Australian Prime Minister Anthony Albanese has urged people not to cancel their Easter getaways amid escalating fuel pressures as he announced a cut in fuel excise.
A 50% reduction of the excise in Australia would reduce the cost of fuel by A26.3c (31.5c) per litre, he told reporters on Monday, meaning a A$16 reduction when filling up a 60-litre tank.
“We are making fuel cheaper today because we understand that Australians are under serious pressure,” Albanese said.
It came days after Treasurer Jim Chalmers ruled out cutting the excise, saying it was not being considered by the Government, despite pressure from the opposition to do the same.
Albanese went on to “encourage Australians who can to take public transport, to help save fuel for the areas and industries that need it”.
“And I note a couple of jurisdictions have taken action to reduce public transport fares as well,” Albanese said, referring to Victoria and Tasmania.
“The less fuel we use in the cities, obviously the more we can direct to regional areas that are under pressure.”
He also announced the heavy vehicle road user charge of A32.4 cents per litre, would be temporarily scrapped to “help truckies continue their vital work for our nation”.
A planned 6% increase for the charge will also be delayed by six months.
Asked later if Australians should reconsider their Easter road trips amid the uncertainty, he said: “People should enjoy their Easter, and it’s important as well that we keep the economy going.
“Easter is an important time for tourism destinations, for jobs. They rely upon that. And I wish those people of faith as well a holy Easter. It’s an important time.”
Chalmers, speaking alongside Albanese, said the changes to the excise and road user charge were “timely”, “targeted” and “responsible”.
He also revealed it was projected to cost taxpayers A$2.55 billion, “depending, of course, on the amount of demand in the system over that three-month period”.
“But the initial costing is A$2.55b, and the revenue forgone by delaying the increase in the heavy vehicle road user charge is about another A$53 million,” Chalmers said.
The Coalition has welcomed the move but decried it as “overdue”.
“Australian families and small businesses will pay less for fuel because the Coalition led and the Government followed,” Opposition leader Angus Taylor said in a statement.
“This is overdue relief that will take pressure off the cost of living and help keep supply chains moving ahead of Easter.
“We welcome the national fuel security plan, but the reality is we still do not have a clear plan to get fuel to the servos that have run dry.
“And the Prime Minister still has not ruled out heavy-handed mandates that Australians do not want.”
Albanese also announced Australia would adopt a national fuel security plan finalised with the support of states and territories over the past week.
“Early action coupled with new supply measures will make a difference and make sure that fuel continues to get to those who need it most,” he said.
According to the plan, the Government’s approach to the crisis will be determined by four levels of action.
The first, “Plan and Prepare”, meant the business-as-usual operation of fuel supply, with Government monitoring impacts of “global factors”, Albanese said.
He followed up, saying: “Clearly, we’re beyond that.”
“Level two, where we are now, ‘Keep Australia Moving’. Fuel supply continues to operate effectively, but localised supply disruptions occur … [the] Government’s taking precautionary actions to shore up fuel supply,” he said.
“And secondly, if you like, the voluntary component as well. Only buy the fuel you need, make voluntary choices to use less and avoid the impact of higher fuel prices.”
The third level, “Taking Targeted Action”, was one Albanese hoped “to avoid”, describing it as “ongoing supply disruptions” that would trigger a “focus on getting fuel to where it’s needed most, and adopt voluntary, practical measures to limit fuel use”.
Asked if this stage would include fuel rationing, Albanese refused to answer the question.
The fourth stage, “Protecting Critical Services for All Australians”, would be defined by ongoing supply disruptions that required “Government action to ensure critical users are protected and the economy remains open and operating”, he said.
In March, every fuel shipment that was expected to arrive has made it to Australia’s shores, Albanese said, while reiterating Australia has “more fuel than anticipated” and the nation’s supply was secure.
In April, six out of 81 cargoes were cancelled, but he said they had been “more than replaced” by the nine additional ships arriving in May.
Earlier, Energy Minister Chris Bowen also pointed to the Government’s new fuel security powers – introduced in the House of Representatives on Monday – to underwrite extra shipments to Australia to help mitigate risks in “a very volatile international fuel market”.
The changes will require the support of either the Greens or the Coalition, who hold the balance of power in the upper house, to become enshrined into law. Bowen confirmed both had been briefed on the legislation the night before it was introduced to the House.
“This is about being ahead of the curve. It’s about pre-empting increasing risk in the market and ensuring that Australian firms are able to go out and compete with firms around the world to get that fuel for us,” he said.
Sign up to Herald Premium Editor’s Picks, delivered straight to your inbox every Friday. Editor-in-Chief Murray Kirkness picks the week’s best features, interviews and investigations. Sign up for Herald Premium here.