Why Australians Should Not Worry About Fuel Prices as War in Iran Escalates
Topic: Oil and Gas
Thu 16 Jul 2026 at 4:48am
The price of oil has risen again due to fighting in the Middle East.
People are watching to see how the situation in the Strait of Hormuz will affect fuel prices.
The US and Iran are fighting, and the price of oil has gone up more than 10 percent.
The US has started a naval blockade of the Strait of Hormuz, but President Trump will not charge a 20 percent fee on shipping.
Analysts have warned that if the oil price stays high, it could lead to more expensive fuel.
Fighting between the US and Iran has experts warning that fuel prices could rise again.
But supply chain experts say the reaction at the pump will be less severe than the initial price surge in March.
Professor Daniel Prior said there is cause for concern, but things are in place to reduce the severity of the issue.
The difference now is that there are things in place to reduce the severity of the issue.
See what's happening with petrol and diesel prices near you.
In March, the International Energy Agency released 400 million barrels of oil from strategic reserves.
There have been international agreements to bolster fuel supply in Australia.
Professor Prior said that increasing supply and reconfiguring oil sourcing have helped.
The federal government has a policy around national oil security protocols.
Oil peaked in April at about $US113 a barrel, and it might go up to $110 per barrel again.
But with buffers, the price might not go up that high.
Drivers are adjusting to higher prices
Kannan Govindan said supply should only be affected if the situation continues for a long time.
Much depends on how much shipping is affected and how long it lasts.
It is uncertain how much petrol prices will spike.
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Prices might jump, but we need to wait and see.
It might be too early to react.
The fuel excise will be cut on August 2, and prices will jump at least 16 cents.
This will raise the average fuel price from about $1.70 per litre to the $2 mark.
Luckily, this is not a new situation.
It's been six months of conflict, and Australians have got used to it.
There will be people who are more susceptible to fuel changes.
I wouldn't expect the same degree of panic as earlier in the year.
What is happening with the fuel excise cut?
The federal government halved the fuel excise in March to buffer the impact of rising oil prices.
It reduced fuel costs by 26.3 cents per litre.
Then, in June, the excise cut was extended but to a lesser extent.
The 32-cents-per-litre cut dropped to 16 cents per litre.
This will taper off completely on August 2.
Prime Minister Anthony Albanese said he would not rule out another extension of the discount.
What about supply?
Australia is at stage 2 of the National Fuel Security Plan.
The most recent data shows that Australia has in reserve:
How do I shop around for fuel?
The Australian Competition and Consumer Commission urges consumers to shop around for fuel.
Thu 16 Jul 2026 at 4:48am
Thu 16 Jul 2026 at 11:06am
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