Aussie motorists warned petrol costs could keep climbing - as Albanese government insists fuel supply is secure

By TESS IKONOMOU FOR AUSTRALIAN ASSOCIATED PRESS and CAITLIN POWELL - NEWS REPORTER Published: 05:52, 25 July 2026 | Updated: 05:52, 25 July 2026 Higher prices at the bowser are expected to continue hitting motorists as tensions involving Iran persist and the Albanese government's temporary cut to fuel taxes comes to an end.  The scaled-back extension of the fuel excise reduction of 16 cents per litre for petrol and diesel will apply until August 2. It is unlikely the discount will be extended. The fragile pause in hostilities involving Iran has come under renewed strain, with US President Donald Trump threatening a 'massive attack' on Tehran, saying the country had not 'received enough pain'.  Escalating conflict has pushed petrol prices higher in Australia, with unleaded averaging $1.85 a litre after a three-cent overnight increase, NRMA spokesman Peter Khoury said. Diesel prices also rose by as much as five cents, with the national average reaching $2.26 a litre. 'We're seeing prices start to head north, and wholesale prices have also gone up,' he told AAP. 'That's going up about 10 cents this week, so those increases are likely to flow on.' Higher prices at the bowser are expected to continue hitting motorists as tensions over the Iran conflict continue and the government's temporary cut to fuel taxes comes to an end (stock) On Saturday, Energy Minister Chris Bowen (pictured) said Australians could be confident in fuel supplies despite geopolitical uncertainty On Saturday, Energy Minister Chris Bowen told reporters Australians could be confident in fuel supplies despite geopolitical uncertainty. 'One thing Australians can be certain about is that our fuel supply continues to be solid and secure,' he said, according to ABC News. 'I can tell you that we have 42 days' worth of petrol, 38 days' worth of diesel, and 32 days' worth of jet fuel. 'All of these figures are more than we had on the day Iran was first bombed, on February 28.' Bowen said 51 ships were on the water with 3.1 billion litres due for delivery in the next month as well as the 6.2 billion litres of fuel in stock. 'Obviously, as we've said consistently, we want to see the situation in the Middle East return to normal,' he said. 'In the meantime, we'll continue the efforts and the work with our trading partners, with our refiners, to ensure that Australians can have confidence in our fuel supply.' But Mr Khoury said that, while the government had secured Australia's fuel supply, this would not impact the high prices motorists were likely to face. But NRMA's Peter Khoury (pictured) said that, while the government had secured Australia's fuel supply, this would not impact the high prices motorists were likely to face 'Unfortunately, until the war ends in the Middle East and they have reopened the Strait of Hormuz, price is going to continue to be volatile,' he said. With much of Australia's mining, agriculture and transport sectors dependent on diesel, the broader economic impact could be extensive, Mr Khoury said.  Australia sources most of its imported fuel from regional Asian markets, prompting Prime Minister Anthony Albanese to travel earlier this year to key partners such as Singapore to help secure supply chains.  As shipping in the Strait of Hormuz remains disrupted, another choke point could emerge in the Red Sea after Iran-backed Houthi rebels claimed they struck two tankers in the key trading route. An escalation could pose a further threat to global energy supplies and price hikes. Experts have warned of a shortage of refined fuels such as petrol and diesel, which could sting the global economy. The government continued to review its policy settings to help manage hip pocket pain for motorists, Treasurer Jim Chalmers said. 'We extended our cut to the fuel tax for another month to help take the sting out of petrol prices for Australian motorists and businesses,' Dr Chalmers said. 'This extra month of fuel tax discount is helping Australian motorists and businesses with the cost of living as this support tapers off.'