The opposition's proposed "fuel price shield" would automatically halve the fuel excise - saving drivers about 27c per litre on petrol or diesel - for up to three months when the price of crude oil topped $US100 per barrel, on average, for two weeks.
The heavy road user charge would also be halted.
The estimated cost of the policy while it was in operation would be almost $1 billion per month.
Opposition Leader Angus Taylor said the policy would be funded by another coalition promise to cut the tobacco excise by 80 per cent.
"The cut to tobacco excise will raise $8 billion of funding," he told reporters outside a petrol station in Canberra on Sunday.
"We worked through that with the Parliamentary Budget Office and that will fully fund the cut to the fuel excise."
The policy would be "anti-inflationary", Mr Taylor said, as it would take pressure off transport costs and provide relief for motorists when prices approached $3 per litre at the bowser.
The price of Brent crude oil has repeatedly breached $US100 during the US-Israel war on Iran, which has led to Tehran effectively closing the Strait of Hormuz, a key shipping channel.
More recently, fuel supplies have been further disrupted with attacks on Saudi oil exports.
In response, petrol prices have leapt across Australia, reaching an average of $2.30 per litre or higher across state capitals.
The May budget forecast prices to return to $US80 by mid-2027, but some experts have since predicted oil prices could reach as high as $US150 per barrel as global stockpiles are depleted.
In response to soaring prices at the outbreak of hostilities in the Middle East, the government temporarily halved fuel excise in April, slashing about 26 cents per litre from the cost at the bowser.
A scaled-back extension of the discount, at 16 cents per litre for petrol and diesel, lasted until August 2.
Treasurer Jim Chalmers dismissed the coalition policy as a political move performed in response to rising voter support for One Nation.
"What we've seen overnight from Angus Taylor is more about polling numbers than petrol prices," he told News24's Sunday Agenda program.
"He is under very serious political pressure and that matters much more to him than the cost-of-living pressures that people are feeling around the country."
Labor has not ruled out another temporary cut to fuel excise if international conditions deteriorate.
Energy Minister Chris Bowen is set to travel to Saudi Arabia in the coming days to discuss the flow of oil to refineries around the world.
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