Australia’s Fuel Excise Cut Ends August 3; Petrol Prices Set to Jump 16c

Australia’s fuel excise discount ended at midnight on August 3, 2026, returning the tax to its full rate and adding 16 cents per litre to wholesale fuel prices. Petrol is forecast to reach about A$2.20 per litre and diesel A$2.60 per litre within 10 days. Treasurer Jim Chalmers has warned service stations that the Australian Competition and Consumer Commission can fine them up to A$100 million per offence for artificial price inflation.

How the excise cut worked and why it ended

The federal government introduced a 60% fuel excise discount in April 2026 after the US-Iran conflict disrupted oil shipments through the Strait of Hormuz. The initial cut was 32 cents per litre, reducing the excise from 52.6 cents to 20.6 cents. In July, the government halved the discount to 16 cents. The cut was always temporary, and the government confirmed it would not be extended despite ongoing Middle East tensions and cost-of-living pressure.

Price increases already underway

Petrol prices have already risen by an average of 40 cents per litre since the end of June, while diesel has jumped more than 60 cents per litre in most capital cities. The full excise return will add another 16 cents per litre to wholesale prices. RACQ principal economist Ian Jeffreys advised motorists to fill up as soon as possible to avoid paying a premium, with the price increase expected to flow through to bowsers within 10 days.

Government cracks down on price gouging

Treasurer Jim Chalmers has written to the ACCC asking for increased scrutiny of fuel prices to prevent artificial inflation. The regulator can fine service stations and suppliers up to A$100 million per offence. Chalmers told ABC Radio on Monday that servos are “on notice” and the regulator will be “watching them like a hawk.” He said the government will not use the return to normal excise settings as “cover for treating motorists as mugs.”

Global oil prices add to pressure

The excise cut’s end coincides with a jump in global oil prices from below US$85 a barrel to about US$90 in the past fortnight, driven by renewed Middle East tensions. Australia imports the equivalent of about 90 per cent of its refined oil needs from sources relying on crude oil movement through the Strait of Hormuz. Energy Minister Chris Bowen urged motorists not to stockpile fuel, saying Australia has several weeks’ worth of unleaded and diesel reserves with more shipments on the way.

Final Thoughts

With the excise cut ended and global oil prices rising, Australian motorists face immediate pain at the pump. The government’s warning to service stations signals it will police price gouging closely, but fuel costs will remain elevated until Middle East tensions ease and global oil prices fall.

FAQs

Disclaimer:

The content shared by Meyka AI PTY LTD is solely for research and informational purposes.  Meyka is not a financial advisory service, and the information provided should not be considered investment or trading advice.