Petrol prices jumped 3 cents overnight to an average of $1.85 a litre, while diesel rose 5 cents to $2.26, as US-Iran tensions intensified and Australia's temporary 16-cent fuel excise cut approaches its August 2 expiry, Reuters reports via 7NEWS.

Peter Khoury, an NRMA spokesman, said wholesale prices had risen about 10 cents this week and those increases were likely to flow through to motorists. "Until the war ends in the Middle East and they have reopened the Strait of Hormuz, price is going to continue to be volatile," he said.

Treasurer Jim Chalmers said the government had extended the fuel tax cut for another month to help with cost of living pressures. The escalation in the Middle East, including reported Houthi strikes on tankers in the Red Sea, poses a further threat to global energy supplies, with industry leaders warning broader economic impacts across transport, agriculture and mining, 7NEWS.com.au reports.