Fuel prices to jump $10 per tank: Federal fuel excise discount will be phased out from July

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The Federal Government will begin to phase out fuel price relief tomorrow on 1 July, as it lifts the $0.32 per litre fuel excise discount that has been in place since 1 April 2026. 

But fuel prices won’t return to normal just yet, with a supplementary excise cut of $0.16 per litre to be introduced between 1 July and 2 August, tapering the price back to normalcy.

This will increase the cost of a 65-litre fill by about $10, regardless of whether it’s petrol or diesel, come 1 July. The Federal Government says its smaller $0.16/L discount will however represent a saving of $11 per 65L fill as opposed to no excise discount at-all. 

The original legislation, which came into effect 1 April aimed to reduce the cost of a 65-litre fill by almost $19. It halved the fuel excise to immediately drop fuel prices by a fixed rate of $0.32 per litre. 

Following the change, Australia’s national weekly average retail price for regular unleaded petrol fell from $2.53/L (29 March) to $1.92/L (26 April), according data collected from the Australian Institute of Petroleum.

Now exiting the month of June, the national average for fuel has dropped to about $1.59/L – roughly $104 for a 65L fill. 

The weekly national average price of diesel has also dropped markedly since March 30, falling from $3.10 to $2.75 into the month of April, and currently sitting at $1.85 per litre. 

That’s over $80 in difference between two identical 65-litre tanks of diesel bought in March ($201.5) and June ($120.3). Moving into July, that tank should cost $130.7, bumping June’s diesel prices by a fixed rate of $0.16 to sit at $2.01 per litre.

Petrol, meanwhile, will rise by the same $0.16 figure in July to sit at a theoretical average price of $1.76/L – around $114 for a 65-litre tank. 

From 3 August, these prices will rise again, with a ‘business as usual’ fuel excise model theoretically raising the cost of unleaded to $1.92/L and diesel to $2.17/L. At the pump that’s approximately $125 and $141 respectively for a full tank of each fuel.

The Government initially cut its fuel excise due to a sharp increase in fuel costs — particularly diesel — resulting from war in the Middle East. With an agreement between Iran and the USA to reopen the Strait of Hormuz, fuel prices are predicted to stabilise in the coming months. 

The fuel excise relief was paired with a reduction in the Heavy Vehicle Road User Charge, both aimed to combat increasing cost-of-living pressures in a $2.9 billion package.