Motorists to lose fuel discount from Monday

Fuel discount to be scrapped despite potential escalation of war in IranPosted Wed 29 Jul 2026 at 1:59pmWed 29 Jul 2026 at 1:59pmThe government's fuel discount will end on Monday. (AAP: George Chan)In short:Motorists will lose their fuel discount from Monday.The government says the scheme, introduced in April to help motorists experiencing price shock due to the war in the Iran, was never meant to be permanent.What's next?Treasury has warned the world's oil supply has "weaker buffers" to deal with a second oil shock.Drivers will lose their fuel discount from Monday after the government officially confirmed the fuel excise relief will end as planned, despite escalating pressure on global oil prices due to the war in Iran.The original 50 per cent discount, which knocked 32 cents off each litre of petrol, was dropped back to 16 cents from July and is scheduled to end on August 2.Treasurer Jim Chalmers said it was "never the government's intention" to make the scheme permanent."The fuel excise relief will end at midnight on Sunday," he said."It has played a really important role, helping to take some of the sting out of the cost-of-living pressures."It was never the government's intention for that to be permanent."He said the discount was being binned at the start of the month "deliberately" to create a smooth downward taper from its original relief of 32 cents.The Heavy Vehicle Road User Charge discount will also end on Monday.Last week, oil prices crept over $US100 a barrel for the first time since May. It dipped back down to $US86.36 a barrel on Wednesday.It follows a fresh escalation in the conflict between the United States and Iran as a memorandum of understanding between the two has unravelled.Treasury warns world has 'weaker buffers' to absorb second shockThe confirmation comes despite a warning from Treasury that the world had depleted reserves and "weaker buffers" to absorb ongoing disruptions to oil supply.In a briefing note seen by the ABC, Treasury said the spread of the conflict into the Red Sea, an alternative to the Strait of Hormuz, as well as Ukrainian drone strikes on Russian oil refineries, had damaged global resilience."During the initial phase of the conflict, the energy price shock, although significant, was contained … [including by] re-routing of exports, a drawdown in oil inventories, and some demand destruction," the briefing notes stated."The oil market is now more vulnerable … These factors mean that crude oil prices are likely to remain elevated in the near term. Upside risks to oil prices will build if the status quo persists … price pressures may intensify over coming months."On Saturday, Energy Minister Chris Bowen said Australians could be confident that supplies were stable.Australia currently has 42 days of petrol, 38 days of petrol, and 32 days of jet fuel in stockpile.