Middle East shipping escalation about to hit every Australian wallet

Australians are being warned that high fuel prices are likely to stay as the war in the Middle East reaches dangerous new levels of escalation.

As the US-led war on Iran shows no signs of ending and oil tankers are being targeted and sunk in the Strait of Hormuz by both sides, global oil prices have surged above US $100 ($139.5) a barrel.

This has led to fuel prices in Australia jumping at the bowser to an average price for regular unleaded of $2.11, a massive increase from $1.55 in July.

The surging prices are sparking inflation fears and raising concerns that the Reserve Bank of Australia will lift the cash rate when the monetary policy board meets again at the end of September .

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High fuel prices were the "new norm", NRMA spokesman Peter Khoury said.

"It really depends exclusively, almost, on what's going to happen in the Middle East," he said.

"We've seen dangerous levels of escalation in the last few days, so you've got the situation where they're blowing up each other's oil tankers in the ocean, so that doesn't help."

In response to soaring prices at the start of the conflict in the Middle East in March, the Albanese government temporarily halved the fuel excise in April, slashing 26 cents off a litre.

A scaled-back extension of the fuel excise was reduced to 16 cents per litre for petrol and diesel, which lasted until 2 August.

Khoury said the government keeping its options open remained the best approach to the unfolding crisis.

"Even though the average price for unleaded nationally is $2.11, in April it was $2.60, and that was at that point when the government cut the excise," he said.

"We're nowhere near where we were when we hit those record high levels.

"It is obviously expensive, more expensive than we want it to be, but it's nowhere near those levels."