The government has announced a $400m extension of fuel relief, with drivers set to receive 16¢ a litre off fuel for the month of July.

The reduction from the previous 32¢ discount was seen as a 'sensible thing to do' by Prime Minister Anthony Albanese, who said that families were still under pressure from the conflict in the Middle East.

'The impact of this conflict will have a long economic tail to it,' Albanese said in a statement. 'A step-down is a sensible thing to do.'

The move was welcomed by opposition leaders, who had previously called for a reduction in the fuel excise cut. 'We understand the logic of having a graduated taper of this, and as I say, we'll look at it,' said Opposition Leader Angus Taylor.

But the extension of the fuel relief did not come without controversy. Former Nationals leader David Littleproud said that the move was 'still a kick in the guts' for motorists.

'I've got a national cabinet meeting on Monday, and I've already had discussions with the chair of the Council of Federation, Premier Roger Cook, to inform him that we'll take a proposal,' Albanese said.

The government's decision to extend the fuel relief was made as tensions rose in the Middle East. Iran had accused the US of a 'clear breach of its commitments' on Friday, and had closed the Strait of Hormuz.

Albanese said that the government would continue to assess the circumstances in the Middle East and respond to future shocks appropriately.

But the decision has been met with skepticism by some. 'If you think of it from an Australian point of view, if we actually had missiles raining down on our country, the expectation would be our government acts,' said Coalition foreign affairs spokesman Ted O'Brien.

O'Brien was referring to the conflict between Israel and Lebanon, which has seen missiles rain down on Israeli cities. Australia has previously condemned the attacks, and had expelled the Iranian ambassador from the country.

The extension of the fuel relief is expected to cost the government $400m, and will be funded by a reduction in the fuel excise cut.

It is not clear how long the extension will last, but Albanese said that the government would continue to assess the situation and respond accordingly.

The decision has been welcomed by many, but has been met with skepticism by others.

'I've been saying for a while that we need to give people a break, and this is a good start,' said a spokesperson for the Australian Chamber of Commerce and Industry.

But others have criticized the decision, saying that it is not enough to help motorists.

'I'm not sure this will make a huge difference to people's lives,' said a spokesperson for the Australian Automobile Association.

The decision to extend the fuel relief is a significant one, and has been made in the face of growing tensions in the Middle East.

It is not clear how long the extension will last, but Albanese said that the government would continue to assess the situation and respond accordingly.

Key Facts:

  • The government has announced a $400m extension of fuel relief.
  • Drivers will receive 16¢ a litre off fuel for the month of July.
  • The reduction from the previous 32¢ discount was seen as a 'sensible thing to do' by Prime Minister Anthony Albanese.
  • The move was welcomed by opposition leaders.
  • The decision has been met with skepticism by some.
  • The extension of the fuel relief is expected to cost the government $400m.