Fuel excise to be halved, road user charge slashed: Albanese

Australia will halve the fuel excise and cut the heavy vehicle road user charge to zero for three months, Anthony Albanese says, following an emergency national cabinet meeting convened to discuss a national approach to looming fuel supply shortages.

A 50 per cent reduction of the excise would reduce the cost of fuel by 26.3 cents per litre, the Prime Minister said.

”We are making fuel cheaper today because we understand that Australians are under serious pressure,” Mr Albanese said.

It comes 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.

“We really want 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 the jurisdictions have taken action to reduce public transport fares as well,” Mr Albanese said.

“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 will be temporarily scrapped to help “ “help truckies continue their vital work for our nation.”

“For many trucking companies that are small, they rely upon a cash flow which is under pressure, because they pay for their fuel, and then they get paid down the track in 30, 60, or 90 days, depending upon the contractual arrangements that they have. This is about taking pressure off them,” he said.

Mr Chalmers – speaking alongside Mr Albanese – said the changes were “timely”, “targeted” and “responsible”.

He also revealed it would cost taxpayers about $2.55 billion, “depending, of course, on the amount of demand in the system over that 3-month period.”

“But the initial costing is 2.55, and the revenue forgone by delaying the increase in the heavy vehicle road user charge is about another $53 million,” Mr Chalmers said.

Australia will also adopt a National Fuel Security Plan that had been finalised with the support of states and territories who had collaborated over the last week to ensure the delivery of a “consistent” plan, Mr Albanese said.

“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 fuel security 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”, Mr 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 Mr 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, Mr 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 single fuel shipment that was expected to arrive has made it to Australia’s shores, Mr 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 Mr Albanese claimed they had been “more than replaced” by the nine additional ships arriving in May.

More to come.