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AAP
AAP
Politics
Zac de Silva, Andrew Brown, Tess Ikonomou and Morgan Reinwald

Signs point to bumpy road for motorists in fuel crisis

Australia is at level two of the fuel security plan, where measures to conserve fuel are encouraged. (Jono Searle/AAP PHOTOS)

Australians have been told to brace for higher fuel prices in coming weeks as one of the world's major oil routes remains closed as a result of the Iran war.

Prime Minister Anthony Albanese has confirmed he will meet state and territory leaders in early May, the week before the federal budget is handed down.

NRMA spokesman Peter Khoury said there had been slow increases in the price of fuel after promising reductions.

"We're not out of the woods," he told reporters in Sydney.

"If we see a permanent ceasefire but also a reopening of the Strait of Hormuz, then we will see these prices fall again. 

"But if we continue on the path we're currently on, then unfortunately that is likely to mean higher prices for Australians in the weeks ahead."

Vehicles are seen travelling along the Eastern Freeway in Melbourne
After promising reductions, fuel prices have slowly risen, the NRMA says, as the Iran war goes on. (James Ross/AAP PHOTOS)

Iran has vowed to keep the crucial oil passageway closed unless the US ends its war as negotiations to end the conflict stall.

Australia is sitting at level two of a four-level plan, where precautionary measures to conserve fuel are encouraged.

Increasing to level three would mean further measures to save petrol and diesel.

Mr Albanese said any move to a higher level of fuel security would be signalled well in advance, rather than made as a snap decision at a national cabinet meeting.

"We know that supplies are firm right through May, into June," he said.

"That's the point (of) having regular meetings every fortnight, so that people don't go, 'Oh my goodness, there's a national cabinet meeting'."

Australian Prime Minister Anthony Albanese in Canberra on Tuesday.
Any move to a higher level of fuel security will be signalled in advance, the prime minister says. (Lukas Coch/AAP PHOTOS)

The prime minister remained confident the nation could emerge stronger from the fuel crisis.

"You'll see further announcements in coming days about securing supplies from our region," he said.

Fuel and energy will be on the agenda when Mr Albanese will hold talks with Japanese Prime Minister Sanae Takaichi in Canberra on Monday. 

Foreign Minister Penny Wong is meeting her Chinese counterpart on energy supply during her visit to Beijing.

In a major shake-up of the global oil supply power stakes, the United Arab Emirates has announced plans to withdraw from the Organisation of Petroleum Exporting Countries from the start of May.

OPEC is a group of oil-producing nations, which co-ordinate production levels to maximise profits. 

It controls almost 80 per cent of the world's proven reserves and produces 40 per cent of global oil supply.

fuel
NRMA spokesman Peter Khoury says the UAE's move will put downward pressure on global oil prices. (Mick Tsikas/AAP PHOTOS)

The Gulf state has long baulked at OPEC's limits on its production, wanting to export much more oil to the world which has been welcomed by motoring groups.

The country's decision to quit the grouping would likely lead to cheaper petrol, but not until the Strait of Hormuz reopens, Mr Khoury said.

The coalition has defended its new energy policy announced this week, which would force fuel companies to stockpile more petrol and diesel while pushing prices at the bowser up by about one cent a litre.

"We think that's a reasonable premium to get another 30 days of storage," Nationals Leader Matt Canavan told Nine's Today program.

Senator Canavan said the coalition would also push to build a new refinery near Gladstone in Queensland to bolster Australia's fuel security.

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