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Government to use taxpayer funds to underwrite cost of petrol

The Albanese government will use public funds to bring down the cost of fuel in a bid to reduce prices at the pump and secure Australia's supply.

Fuel is running low or out entirely at hundreds of petrol stations around the country, with the cost of diesel well over $3 a litre and unleaded petrol sitting at around $2.60.

Ahead of a meeting of state and territory leaders today and a national cabinet meeting tomorrow, the federal government has announced it will chip in to underwrite fuel costs for fuel suppliers across the country as the Middle East conflict continues.

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The government's plan to underwrite fuel costs is aimed to shore up supply and bring down costs.

It is designed to keep prices cheaper, but more importantly, ensure that fuel keeps coming into the country.

Speaking yesterday, Energy Minister Chris Bowen said Australia had about nine days' worth of petrol, a number he said was "slightly up" on previous figures, and about one month's worth of diesel.

Nine News' Political Editor Charles Croucher said the government was fighting a difficult battle trying to solve multiple issues at once, as well as co-ordinating a national response, rather than the state-by-state model seen during the COVID-19 pandemic.

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"It all feels like a bit of a game of whack-a-mole at the moment. There's all of these problems popping up everywhere, and the governments keep trying to smack them as they arrive," he said on Today.

"That's the hardest part of a crisis like this. You're constantly trying to get in front of something that you haven't seen before in this country, this kind of shortage in this kind of manner, with prices at this height."

The opposition has called on the government to cut the fuel excise to bring instant price relief at the bowser, but Croucher questioned whether it would be a truly effective strategy given the unprecedented crisis facing the country.

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A cut to the fuel excise may not happen, according to Charles Croucher.

"Taking the excise off fuel brings prices down a little bit, but in this environment where prices are surging… there's just no guarantee," he said, noting it would need to be tightly enforced to ensure fuel companies didn't take the profits unfairly.

He said tax breaks to farmers and transport companies were a more timely and needed measure that would bring relief from fuel and cost-of-living pressures.

"It makes it easier for people," he said. "We need more of that."

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