Minister for Finance Katy Gallagher speaks in the Senate Chamber in Canberra, Australia, on Nov. 3, 2025. Hilary Wardhaugh/Getty Images
Finance Minister Katy Gallagher has said the Labor government will not support the Coalition’s plan to halve the fuel excise whenever the average Brent crude oil price reaches US$100 ($140) a barrel per fortnight.
The Coalition said its proposed “Fuel Price Shield,” which would be funded through changes to the tobacco excise, would reduce the fuel tax by 27 cents a litre, or about $15 per standard tank.
But Gallagher said the plan was “unfunded” and “uncosted.”
“I think if you also look back and see all of the other range of promises they have made since the election, there are hundreds of billions of dollars in unfunded promises, and this adds to that list,” she told ABC Radio.
Gallagher said Labor had no plans for additional fuel excise cuts and would focus on tax cuts instead.
“Obviously, we’ve helped when the war started with some changes to the fuel excise, but we’ve shifted … to providing more permanent cost of living arrangements, including through the tax system, to make sure that that ongoing cost of living help is there permanently, not just in these one-off arrangements,” she said.
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“We’ve got some more tax cuts coming, essentially through the Working Australian Tax Offset and the $1,000 instant deduction.
“So they are built into the system, but also in our increased funding for Medicare and bulk billing and medicines and things like that.”
But Opposition Leader Angus Taylor said Australians needed certainty when fuel prices soared.
“Fuel is not a luxury. Australians need it to get to work, take the kids to school and keep their businesses running,” he said in a statement.
“The Fuel Price Shield would provide certainty. When a serious oil shock hits, the tax comes down automatically. When oil prices return to more normal levels, the ordinary rate is restored.
“It takes the day-to-day politics out of the decision and gives families and businesses greater certainty about what will happen when the next global oil shock arrives.”
Across Australia’s five biggest cities, prices increased by 14.3 cents per litre, hitting 224.2 cents per litre.
“Compared with Feb. 20, around a week before the conflict between the United States, Israel and Iran escalated, average retail petrol prices across the five largest cities were 53.3 cents per litre higher on Sept. 16,” the report stated.
Ongoing conflict in the Middle East has put pressure on oil exports through the Strait of Hormuz, while the Iran-backed Houthi movement in Yemen and armed groups operating from Iraq have launched missiles and drones at Saudi energy infrastructure amid regional tensions.