Australia Considers Fuel Excise Cut Extension Amid Middle East Peace Deal

Albanese stated that while the conflict's end is welcomed, it will take a significant amount of time, potentially many months, for global oil markets to return to normal. The government has previously downplayed the prospect of extending the three-month fuel excise cut and the pause on the heavy vehicle road user charge, which has already cost the budget $2.55 billion. However, Albanese suggested an announcement regarding a possible extension would be made in the coming week after cabinet deliberations, emphasizing the government's concern for practical cost-of-living measures.

The peace deal, mediated by Pakistan, is slated for official signing in Geneva on Friday. Australia had previously supported US and Israeli actions against Iran but has since urged de-escalation. While the deal may help Australia avert Treasury's worst-case inflation scenario of over 7%, Albanese cautioned that economic disruptions would persist.

Following the announcement, Brent crude oil prices fell below $84 a barrel, reaching their lowest levels since early March. Analysts, however, warn that depleting global petroleum reserves will require months to replenish, potentially keeping prices elevated despite the peace agreement. Opposition leader Angus Taylor expressed a wait-and-see approach regarding the fuel excise cut, expecting the drop in crude oil prices to eventually reflect at the pump. He and shadow foreign minister Ted O’Brien welcomed the peace deal, emphasizing the importance of reopening the Strait of Hormuz for global energy and commodity supplies.