Emergency laws will be introduced to federal parliament on Monday which would allow the government to underwrite fuel suppliers seeking stock from across the world and bringing it to Australia.
The government will not pay for the fuel but rather use public funds as insurance for companies having to buy supplies as prices skyrocket.
Ongoing uncertainty about the Iran War, which has driven up prices and dwindled supplies amid a blockaded Strait of Hormuz, has caused the government to propose the special powers.
Prime Minister Anthony Albanese says Australia's fuel supplies are stable and will remain so for coming weeks.
However the powers will help the nation to be "overprepared" for ongoing conflict.
"This isn't about dealing with something that will happen next week, this is prudent planning, this is about being overprepared," he said on Saturday.
"It's a really practical measure so that if there's a cargo ship out there available from a nation like Korea that is being bid upon, then the private sector can do that with the confidence that comes from government support in order to secure that additional supply."
Australia currently has 39 days of petrol, 30 days of diesel and 30 days of jet fuel in stocks.
But people should not feel the need to stockpile fuel for themselves, with Mr Albanese calling on individuals and businesses to use common sense.
"People need to take what they need and no more," he said.
"I don't want things to be mandated but common sense should apply as well.
"There are more people working from home who are able to do so, that makes sense. There are more people catching public transport than before (and) that also makes sense."
In Victoria, the state government will make public transport free for the next month to help people feeling the pinch when filling up their cars.
Passengers will not have to touch-on their myki travel card and all public transport gates will be open from Tuesday, March 31.
Trains, trams and buses are expected to get busier but the government says thousands of extra services have been added to the network to meet demand.
"This is a temporary measure to help with the cost of living; it will take pressure off the pump and help you save," Premier Jacinta Allan said.
"This won't solve every problem but it's an immediate step to help Victorians right now while we keep working on new solutions to make Victoria more affordable."
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