Millions of Victorians are in line for free public transport for another month, and half-price fares for the rest of the year.

Premier Jacinta Allan confirmed on Sunday that daily Myki fares will be capped at $5.70 from June 1, half the usual daily maximum of $11.40. 

The average commuter is expected to save upwards of $850 over the six-month period, according to government estimates.

The new measures will cost $432 million in foregone revenue, plus a further $70 million for April's free travel, and will feature prominently in the state budget due in May, as Victoria heads into an election year.

In a social media video, Allan said the government had been monitoring the impact of climbing fuel prices, driven by conflict in the Middle East. 

'We're extending free public transport for one more month in Victoria, and then we'll make fares half price until the end of the year,' she said.

'I said we would monitor the impacts of war in the Middle East on Victorians, and it is clear that higher prices at the fuel pump will be felt for some time.'

The Premier stressed the relief package was aimed directly at easing household pressure as fuel costs stay high. 

'As premier, I remain determined to do everything within my control to help Victorians deal with the cost of living and these rising fuel prices,' Allan said.

'By extending free public transport for one more month and then making it half price for the rest of the year, we're taking pressure off supply and helping Victorians with the cost of living.'

Allan called the initiative affordable and sustainable, but acknowledged it was not a total fix for household budgets. 

'This plan won't solve all the problems, but it's an immediate and sustainable step to help Victorians right now,' she said.

'And as premier in these globally challenging times, I will always keep looking at ways to help with the cost of living for Victorians.'

Existing concessions will remain, public transport will continue to be free for under 18s and for seniors on weekends.

The policy is designed to ease demand for petrol and diesel as commuters are encouraged to leave the car at home amid ongoing global fuel supply constraints.

'I know this won't solve every problem, but it's another step I can take to help Victorians right now,' Allan said.

The announcement follows fresh concerns about global fuel supply since Iran tightened restrictions in the Strait of Hormuz after an Israeli-US strike.

A fire at the Viva Energy Geelong refinery, one of Australia's last two oil refineries, raised further questions this week. 

The facility supplies more than half of Victoria's fuel and ten per cent nationally, and is currently operating below full capacity.

Despite this, Viva chief executive Scott Wyatt moved to reassure the public. 

'I think there will be no impact to what we supply into the Victorian market as a result of this incident. I'm very confident of that,' Wyatt told reporters on Friday.