The Albanese Government has announced an extension to Australia’s fuel excise relief, keeping petrol and diesel prices 16 cents per litre cheaper than normal rates through July, saving drivers around $11 per tank.
What’s Happening
The fuel excise rate is being reduced from 32 cents to 16 cents per litre for the period of 1 July to 2 August 2026. The discount was originally scheduled to expire on 30 June, by which time it will have cost the federal budget an estimated $2.9 billion in foregone revenue.
The Heavy Vehicle Road User Charge is also being reduced by 16 cents per litre for the same period, providing relief to transport and freight operators.
Why It’s Happening
The original fuel excise cut was introduced on 1 April 2026, slashing the excise from 52.6 cents per litre to 20.6 cents per litre following disruptions to global oil markets caused by conflict in the Middle East. Since the excise reduction took effect, retail diesel prices are down 39% and petrol prices are down 36%across Australia’s five largest cities.
Since the end of March, petrol prices in most capital cities are around 90 cents per litre lower and diesel prices are around $1 per litre lower than before the relief measures were introduced.
How Long Will It Last?
This extension is temporary. The relief runs from 1 July to 2 August 2026, after which a graduated return to normal excise settings is expected. The government has framed it as a transitional measure while global energy markets stabilise following the Middle East conflict.
The Australian Competition and Consumer Commission (ACCC) is continuing to monitor fuel prices to ensure the lower excise rate is fully passed on at the bowser, backed by stronger penalties and additional enforcement resourcing.
What It Means for Drivers
For everyday motorists, the extension buys another month of lower fuel costs before prices are expected to gradually rise. The cost of the extension to the fuel excise cut and the reduction in the Heavy Vehicle Road User Charge will be around $400 million. For anyone considering a new car purchase, particularly a petrol or diesel vehicle, the next few weeks represent the lowest pump prices Australian drivers are likely to see for some time.
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