Petrol excise cut ends 2 August, adding $10 to a full tank

By Rosa Henriquez · 2026-07-28

What changes on 2 August

From 3 August 2026, the fuel excise rate returns to 52.6 cents per litre, up from the discounted 36.6 cents per litre that has applied since 1 July.verifiedVerified Source: infrastructure.gov.au^[1] The Heavy Vehicle Road User Charge rises in parallel, from 16.4 cents per litre back to 32.4 cents per litre on the same date.^[1]

For a motorist filling a standard 65-litre tank, the 16-cent restoration adds roughly $10 overnight. The federal government's own modelling put the saving at around $11 per fill during the discounted period, a figure that now runs in reverse from 3 August.^[2]

What the government is signalling

Prime Minister Anthony Albanese said his government is reviewing its options, stopping short of committing to any further extension. "I've said that we'll examine those issues with regard to fuel excise, and we'll do that over coming days," Albanese said.^[6]

Albanese framed the July extension as targeted cost-of-living support during a turbulent global price environment. "This extra month of fuel discount will help Australian motorists and businesses with the cost of living as this support tapers off," he said.^[2] No legislation extending relief beyond 2 August has been introduced to Parliament.

Why prices are rising at the bowser

The near-closure of the Strait of Hormuz and risks around the Bab el Mandeb in the Red Sea have disrupted roughly 20 per cent of daily global oil flows, underpinning a 66 per cent rise in Brent crude since February 2026.verifiedVerified Source: rba.gov.au^[4] The Reserve Bank of Australia identified Middle East conflict and the de-facto closure of the strait as driving global energy prices sharply higher.^[5]

Australian Competition and Consumer Commission data shows capital-city average retail petrol rose 6.6 cents per litre on 1 July alone, settling at 158.1 cents per litre. Prices across cities ranged from a low of 141.7 cents per litre to a high of 189.9 cents per litre.^[3] The ACCC notes that wholesale price increases flow through to retail with a lag, as retailers pass on costs when stations are restocked.^[3]

How the excise relief worked

The Albanese government more than halved the fuel excise rate from 1 April to 30 June 2026, also reducing the Heavy Vehicle Road User Charge to zero for that period.^[1] Parliament then approved a tapered 16-cent-per-litre cut running from 1 July to 2 August, timed to align with the scheduled August excise indexation date to reduce compliance burdens on fuel retailers.

The one-month July extension cost the federal budget around $400 million.verifiedVerified Source: pm.gov.au^[2] That figure covers both the petrol and diesel excise reduction and the parallel cut to the heavy vehicle charge, making it the highest single-month cost across the entire relief package.

Practical guidance for drivers

The ACCC data points to a predictable retail pricing cycle. Prices tend to dip early in the week after stations are restocked, then climb towards the weekend as cheaper stock sells through.^[3] Filling up on a Tuesday or Wednesday morning rather than a Friday or Saturday can cut the per-litre cost even when the overall market is running hot.

State-based fuel price apps, including those tied to mandatory price-reporting schemes in New South Wales, Queensland and Western Australia, let motorists compare live prices at nearby stations. With capital-city averages already above 158.1 cents per litre before the 3 August restoration, and some cities approaching 190 cents, the gap between the cheapest and most expensive station in any given suburb can easily exceed the 16-cent excise increase itself.^[3]

Rosa Henriquez

Rosa Henriquez writes about the cost of living and consumer affairs. She reports from the household end of the economy, where the numbers turn into groceries and bills.