Prime Minister Anthony Albanese has announced a limited extension of the fuel excise, making petrol and diesel 16 cents per litre cheaper than the full price in July.
The current saving is 32 cents a litre after it was cut three months ago, following the outbreak of war in the Middle East and ensuing strangulation of global oil supplies.
That discount is scheduled to expire on June 30, by which time it will have cost the federal budget an estimated $2.9 billion in foregone revenue.
"(The) decision recognises that despite the welcome and substantial drop in the price of petrol recently, we know people are still under pressure," Mr Albanese said.
"Whether it's cutting the fuel tax, the road user charge for truckies or tax cuts for every taxpayer, we're taking action to ease pressure on Australians.
"We'll continue to do what we can to shield Australians from the worst impacts of this conflict including securing additional fuel from our partners."
The much anticipated confirmation of the ongoing albeit reduced saving coincides with a reopening of the Strait of Hormuz and associated agreement between the United States and Iran to cease hostilities.
How long the waterway stays open, though, remains unclear.
Iran's military said overnight it was going to close the strait again due to what it called ceasefire violations by Israel in Lebanon.
Australia currently has 44 days' worth of petrol in reserve, or about eight days more than when the US first bombed Iran in late February.
Diesel stocks are running at 39 days and jet fuel at 32 days.
There are 51 tankers on the water and headed to Australia, with 3.9 billion litres of fuel contracted for delivery in the next month.
Treasurer Jim Chalmers said he hoped the temporary support would still take some of the sting out of petrol prices and help with the cost of living.
"Despite the welcome and substantial drop in the price of petrol recently, we recognise people are still under pressure," he said.
"This extra month of fuel discount will help Australian motorists and businesses with the cost of living as this support tapers off."
The federal government confirmed on Saturday that the second week of June marked the highest level of fuel held in Australia since the minimum stock obligation came into force in 2023.
Last week was the second highest at 6.3 billion litres.
According to the Australian Competition and Consumer Commission, average capital city bowser prices for petrol are hovering between $1.65 and $1.92 per litre.
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