Australia to offer local businesses $693 million in cheap loans amid oil crisis

Australia will provide up to A$1 billion ($693 million) in interest-free loans to critical businesses, including transport operators and fertiliser producers, Prime Minister Anthony Albanese will say on Thursday, as they grapple with surging fuel costs.

The support package comes as the Iran war disrupts global fuel supplies, driving up prices and fuelling concerns of availability as Australia imports more than 80% of its fuel. Fear of shortages has stoked panic buying in some regions, despite government assurances that the market is well supplied.

"No Government can promise to eliminate the pressures this crisis will impose. But we can be a buffer against the worst of it. A shock absorber, in a time of global shocks," Albanese is set to say in a speech to the National Press Club.

The loans will be offered to businesses considered essential to maintaining critical supply chains, helping them tide over the immediate financial pressure.

Albanese warned in a rare national address on Wednesday that the economic fallout from the war in the Middle East would persist for months, impacting both families and businesses.

In his speech on Thursday he will say the move to provide loans underscores his centre-left Labor government's focus on easing cost-of-living pressures, a priority that will shape next month's federal budget.

"It is our government's most important budget to date - and it will be our most ambitious. It has to be. The scale of the challenge facing us - and the breadth of opportunities ahead of us - demands that ambition and that urgency."

($1 = 1.4438 Australian dollars)

-Renju Jose/Reuters