Australia Cuts Fuel Tax and Offers Free Transport as Energy Crisis Bites

Authorities in Australia have rolled out emergency cost-of-living measures—including halving fuel taxes and offering free public transport in some states.

The federal government, led by Prime Minister Anthony Albanese, announced a temporary cut to the fuel excise tax, reducing it by 26.3 cents per litre for petrol and diesel over three months. The move is expected to save motorists between A$10 and A$20 per tank, though it will cost the government about A$2.55bn.

The spike in fuel prices has been driven by the ongoing conflict involving Iran, Israel, and the United States, alongside disruptions to shipping through the Strait of Hormuz—a critical corridor for around 20% of the world’s oil and gas.

At the state level, Victoria has announced free travel on trains, trams, and buses throughout April. Premier Jacinta Allan said the measure aims to ease pressure on households and reduce fuel demand.

Similarly, Tasmania will provide free public transport—including buses, coaches, and ferries—until the end of June. Premier Jeremy Rockliff said the policy is designed to shield residents from rising living costs, with additional savings for families using school transport services.

However, other states have stopped short of adopting similar measures. In New South Wales, Transport Minister John Graham said offering free public transport would impose significant daily costs, arguing funds must be preserved for longer-term economic resilience.