Anthony Albanese has announced a series of new measures designed to steer Australia through the growing global energy crisis and fallout from the war in Iran.
After a meeting of the national cabinet on Monday, the prime minister announced a cut to the fuel excise and released a new, four-stage fuel security plan to manage supply, agreed by the states and territories.
Here’s everything you need to know:
Will fuel be cheaper?
Albanese and the treasurer, Jim Chalmers, announced a 50% cut to the fuel excise, in force for three months. The move will save motorists 26 cents a litre when they fill up their tank.
Motorists will see a change at the bowser from Wednesday. The excise is now set at 52.6c a litre, and will be cut to 26.4c. For a 65-litre tank, the saving will be about $19.
So yes, fuel should become cheaper in the short term, though if global prices keep rising, retail prices could climb again too.
The opposition has been demanding a cut to excise, similar to moves by Scott Morrison after Russia’s invasion of Ukraine in 2022.
The government will also reduce the heavy vehicle road user charge to zero for three months and defer the next scheduled increase for six months.
The full package will cost the budget $2.55bn.
How will fuel supply be maintained?
Along with the energy minister, Chris Bowen, Albanese released a new national fuel security plan. It is designed to coordinate responses to fuel shortages around the country.
The plan has four levels: 1) plan and prepare; 2) keeping Australia moving; 3) taking targeted action; and 4) protecting critical services for all Australians.
Australia is now at level 2, with fuel supply continuing notwithstanding periods of localised supply disruptions.
Under this setting, motorists are encouraged to “only buy the fuel you need”. The plan says making voluntary choices will use less fuel and help consumers avoid the impact of higher fuel prices.
The federal government encourages Australians to use public transport “wherever possible” to help conserve fuel for the regions.
Levels 3 and 4 include tougher conditions designed to prioritise fuel supply to the regions and critical industries.
Will there be fuel rationing?
The plan does not mention fuel rationing explicitly, though it could be required if the situation gets worse in Australia and around the world.
Level 3 of the plan would be reached when disruptions start delaying fuel supply . The level envisages possible “voluntary practical measures to limit fuel use”, while level 4 mentions “government action to ensure critical users are protected, and the economy remains open and operating”.
Minor parties in parliament, including One Nation, have called for fuel rationing, but the government believes it is not currently necessary.
The newly released plan says levels 3 and 4 “are under consideration and may change, depending on circumstances”.
A decision by national cabinet to move up the levels would only take place after consultation with relevant industries, to ensure additional measures are well designed and have the greatest impact.
What if things get worse?
Albanese said Australia is “substantially away” from the need to move from level 2 to level 3. Bowen said under current settings, any change would not be necessary for “quite a while”.
Australia now has 39 days’ worth of petrol, 30 days’ worth of diesel; and 30 days’ worth of jet fuel.
But energy analysts have warned Australia has just weeks of certain fuel imports left as Asian suppliers begin cutting petrol production, predicting more shipments are likely to be delayed or cancelled.
At least six shipments to Australia have been cancelled already, but the government says it has covered those shortages and secured additional supply.
The government is also preparing to rush through new laws to speed up fuel purchases worth as much as $2bn, using a legal power called an advance to the finance minister. Commonly used during the Covid-19 crisis, the advance powers will allow the government to urgently spend money to buy fuel, without the need for signoff from parliament.
What has the reaction been?
The opposition leader, Angus Taylor, said the excise cut decision was overdue.
“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,” he said.
“And the prime minister still has not ruled out heavy-handed mandates that Australians do not want.”
The NSW premier, Chris Minns, said measures such as fuel rationing or encouraging working from home are “still under consideration” under the final two levels of the fuel plan.
Tasmania’s premier, Jeremy Rockliff, said the cut would provide meaningful and immediate relief for households and businesses facing rising costs.
Tom McIlroy is Guardian Australia’s political editor
