Pain to persist at the bowser until Iran war is over

Monday, June 22, 2026

Australian motorists will continue to face high fuel prices despite the government's extension of a temporary fuel excise tax cut, as ongoing Middle East conflicts and the closure of a key shipping route keep global oil costs elevated. Significant and sustained relief for drivers depends on the resolution of regional tensions and the reopening of the Strait of Hormuz, which remains a critical factor in international fuel price stability.

Australian motorists are expected to face continued fuel price pressures until the conflict in the Middle East eases and a key shipping route reopens, according to the NRMA. This comes despite the federal government’s recent decision to extend a temporary reduction in the fuel excise tax for an additional month.

On Sunday, Prime Minister Anthony Albanese announced the extension of the excise cut, which will save drivers approximately 16 cents per litre and reduce the cost of filling a 65-litre tank by around $11. Albanese acknowledged the ongoing financial strain on consumers, noting that while petrol prices had fallen somewhat recently, many households remained under pressure.

The excise reduction, initially introduced as a short-term measure, is viewed by officials and industry representatives as a partial relief rather than a long-term solution. NRMA spokesman Peter Khoury emphasized that global oil prices remain the dominant factor affecting fuel costs, rather than the level of government taxation.

Khoury highlighted the importance of geopolitical developments, particularly the situation in the Middle East and the status of the Strait of Hormuz, a critical global shipping lane for oil exports. “If we’re going to get meaningful relief, it’s going to come when the war ends and the strait reopens and stays open,” he said, referring to the ongoing regional instability.

While the government’s phased approach to reinstating the excise tax reflects the current uncertainty in world energy markets, Khoury said motorists remain vulnerable to volatility driven by international events. He outlined two potential outcomes following the scheduled excise changes on July 1: prices could decline further if peace is maintained and shipping routes reopen, or fuel prices might increase again if tensions escalate.

The continued fluctuation of fuel costs underscores the complex interplay between domestic fiscal measures and broader global factors. For Australian drivers, short-term savings from tax relief provide limited respite amid persistent international market challenges.