Fuel Excise Halved From Tomorrow — What It Actually Saves You

The federal government will halve the fuel excise from tomorrow, cutting 26 cents per litre off the price of petrol and diesel for three months. The measure kicks in on 1 April and runs until 30 June.

What changed

After a national cabinet meeting on Monday, Prime Minister Anthony Albanese announced the fuel excise — currently 52.6 cents per litre — will drop to 26.3 cents. For a 65-litre tank, that's roughly $17 off each fill. For a 90-litre ute or work vehicle, closer to $24.

The government also reduced the heavy vehicle road user charge to zero for three months and deferred its next scheduled increase by six months. The total package costs the budget $2.55 billion.

Treasurer Jim Chalmers has written to the ACCC asking it to ensure retailers pass the cut through to the bowser. The consumer watchdog has been monitoring fuel pricing weekly since the oil shock began in early March, and has already flagged concerns about retailers hiking prices faster than wholesale costs justified.

What it means for household budgets

If you fill up once a week, the excise cut saves around $70 a month for a standard car — or roughly $210 over the three-month window. For households running two cars, that approaches $400.

The catch: global oil prices are still elevated. The Strait of Hormuz disruption has pushed wholesale fuel costs up significantly, and while the excise cut offsets some of that, it doesn't erase it entirely. Retail petrol in capital cities was sitting around $2.20 to $2.40 per litre last week. The cut brings that closer to $1.95 to $2.15 — better, but still well above the $1.60 to $1.80 range most drivers were paying six months ago.

What it means for businesses

For any business running vehicles or equipment, fuel is a direct input cost. The three-month relief window gives some breathing room, particularly for transport, delivery, construction, and trades businesses where fuel is a significant line item.

A tradie filling a 90-litre tank twice a week saves roughly $190 a month. A small fleet of five vehicles could save $950 a month — meaningful cash flow during a period when margins are already under pressure.

The zeroing of the heavy vehicle road user charge is worth watching too. Trucking and logistics businesses pay this on top of excise, so the combined saving is larger than the headline 26 cents suggests.

The relief is temporary — both measures expire at the end of June. If you've been deferring vehicle or equipment maintenance because of running cost pressure, the next three months are a practical window to catch up.

What happens after June

The excise cut is explicitly temporary. Unless the government extends it, the full 52.6 cents per litre snaps back on 1 July.

There's precedent here. In 2022, the Morrison government halved the excise for six months during the Russia-Ukraine oil spike. When it ended, pump prices jumped overnight. Businesses and households should plan for the same possibility this time.

The broader fuel picture depends on how the Middle East conflict develops. Australia currently has 39 days of petrol supply, 30 days of diesel, and 30 days of jet fuel. The government has launched a four-stage national fuel security plan, and Australia is currently at level 2 — "keeping Australia moving" — with voluntary conservation measures encouraged but no rationing in place.

What to do now

Check your fuel spending over the last month. If you've been absorbing higher costs, the excise cut gives you a window to stabilise. For businesses, review whether your pricing or quoting accounts for fuel as a variable cost — if it's been eating into margins, now's the time to reset.

If you're in Victoria, free public transport runs for all of April — worth factoring into commuting costs.

And keep an eye on the ACCC's weekly fuel monitoring updates. The watchdog has the attention of retailers right now, which means the cut is more likely to reach the bowser than it might otherwise.

This article is general information only and is not financial advice.