Australians are being offered free public transport in a dramatic bid to ease the growing cost-of-living crisis sparked by soaring fuel prices. War in Iran and the country’s tight grip on the Strait of Hormuz, a vital passageway through which 20% of the world’s oil and natural gas flows, has seen prices at the pump surge.

In some parts of Australia, as well as in the UK, fuel shortages have been seen due to the block on exports. In a bid to shield households from the squeeze in rising petrol costs, two states have announced they will scrap fares entirely for a limited period. Victoria will make all trains, trams and buses free for a month from March 31, while Tasmania has gone further by waiving fares on buses and ferries until July.

Victorian Premier Jacinta Allan said offering free public transport would make it cheaper for people to leave the car at home and opt for buses, trains and trams instead.

She said: “This is a temporary measure to help with the cost of living – it will take pressure off the pump and help you save.”

Meanwhile, the government of Tasmania — an island off the Australian mainland — said people will be able to use its coaches, buses and ferries free of charge over the coming months.

“We know the rising cost of fuel is impacting the family budget, and that’s why we have again taken strong and decisive action to protect Tasmanians,” its Premier Jeremy Rockliff said.

The policy is expected to save some commuters hundreds of pounds over the coming months, with officials hoping it will also reduce congestion and fuel demand.

Not all states are set to copy the measure, despite pressure by some to do so. New South Wales transport minister John Graham told broadcasters his state was keeping its “powder dry” as “this situation will last more than a month”.

Prices at the pump have surged, climbing from around $1.70 (£0.90) a litre before the crisis to as much as $2.50 (£1.35) in some areas, piling pressure on household budgets.

Iran’s disruption of the Strait of Hormuz has presented difficulties for oil and gas industry, as well as the flow of other products such as fertiliser.

With oil prices spiking and Iran continuing to exercise its control of the vital route, Britain is now expected to face higher inflation and lower growth.

Sir Keir Starmer will gather business leaders in Downing Street on Monday to address the impact of the Iran war.

The Prime Minister is expected to meet senior representatives from the energy, shipping and financial services industries amid warnings the UK could suffer serious economic damage as a result of the conflict.