Motorists will pay an extra 16 cents per litre for petrol from Monday, August 3, with the prime minister backing the end to wartime fuel discounts even as fuel prices ramp back up.
But Anthony Albanese is leaving the door open to reintroducing the fuel excise cut if the war on Iran worsens, as conflict in the Middle East threatens to spiral.
"What we've moved to more and more is ensuring fuel supply and we have more fuel in Australia today than we had (on) February 28," when the war started, Mr Albanese told ABC TV on Thursday.
Depending on the situation in the Middle East and the availability of fuel supplies from the region, a discount could return as the government "will always examine cost-of-living issues'', he added.
The prime minister's message, which comes as prices of unleaded petrol rise back up to almost $2 a litre, confirms the 16-cent a litre discount in fuel will come to an end on Sunday, ending four months of relief at the bowser.
The excise was halved for three months in April at the height of the Iran war, which caused the Strait of Hormuz to close and oil prices to skyrocket.
The government later announced the measure would be tapered in July before being phased out entirely.
"We made the decision to cut the fuel excise and then to halve the cut so that there was a step down. And what we've moved to is permanent cost-of-living support," Mr Albanese said.
"We gave a lot of notice about this decision (to end the discount) when back in June we determined to step down in partnership, of course, with state and territory governments."
The end of the discount comes as tensions in the Middle East ramp up, with fresh strikes between Iran and the US leading to closures of the Strait of Hormuz, through which one-fifth of the world's oil supply is transported.
The nation's truckies and bus companies are set for a double whammy, with Finance Minister Katy Gallagher confirming the heavy vehicle road-user charge discount will also come to an end on Sunday.
That charge is paid by operators of heavy vehicles such as buses and trucks and applies to each litre of diesel paid.
"They were all temporary measures that were taken at a particular time to deal with what we saw from the initial outbreak of the war in the Middle East," she told ABC Radio.
"We're seeing escalation across the Middle East, where we've seen the ceasefire come in, and then we've seen developments since then, and they'll obviously flow through and have an impact (on inflation)."
– AAP
8°C