Jim Chalmers rubbishes Coalition ‘price shield’ as fuel shock deepens

Treasurer Jim Chalmers has rubbished the Coalition’s plan for a fuel price “shield” as war in the Middle East sends prices spiralling again, despite ruling out any return to excise relief for now.

Opposition Leader Angus Taylor announced overnight plans for a 27c per litre cut to the tax on fuel, or about half the excise, to be triggered when the two-week average for Brent crude – the international standard benchmark for fuel price – exceeds US$100 per barrel.

Currently, Brent crude is trading at a two-week average of US$103.87 per barrel, meaning the measure would come into effect immediately.

The Coalition expects the measure, once triggered, to save motorists about $15 on a typical tank on fuel.

The heavy vehicle road user charge will also be reduced from 32c per litre to zero under the plan.

In a statement, Mr Taylor said fuel was “not a luxury” and with global prices once again spiralling, “Australians should know there is a clear automatic safeguard in place to provide temporary and targeted relief”.

“Australians need it to get to work, take the kids to school and keep their businesses running,” Mr Taylor said.

“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.”

Nationals leader Matt Canavan said high fuel prices affected food, freight, and supply across the country, hitting regional communities particularly hard.

“In regional Australia you cannot just decide to stop driving,” he said.

“The Fuel Price Shield is designed to provide temporary relief when international oil markets experience an exceptional shock, while ensuring the ordinary arrangements return once that shock has passed.”

Under the Coalition’s proposal, the excise would return to normal after the eight-week average for Brent crude fell back below $US100 or three months after it was triggered.

The Coalition estimates the shield would only have been triggered twice in the past five years had it already been in place, including at the outset of Russia’s full-scale invasion of Ukraine in early 2022.