Prime Minister Anthony Albanese has announced a three-month halving of the fuel excise, reducing it from 52.6p to 26.3p per litre, effective from 1 April to 30 June. The move, agreed at a national cabinet meeting, is designed to ease pressure on motorists facing rising petrol prices. The heavy vehicle road user charge will also be cut to zero for the same period to support truck drivers.
The excise cut will cost the government £2.55bn, according to Treasurer Jim Chalmers. He has written to the competition watchdog asking it to monitor whether petrol stations pass on the savings. The government claims the reduction will lower the cost of filling a typical 65-litre tank by nearly £19.
National cabinet also agreed on a four-stage fuel security plan, currently at level two, which encourages voluntary measures to reduce fuel demand. Albanese urged Australians to consider public transport, noting that some states have already reduced fares. “The less fuel we use in cities, the more we can direct to regional areas under pressure,” he said.
Opposition leader Angus Taylor welcomed the excise cut as “overdue relief” but criticised the lack of corresponding spending cuts to offset the revenue loss. He also questioned whether the national fuel security plan would improve supply and distribution to petrol stations that have run dry.
Economists have warned that halving the excise is poorly targeted, benefiting wealthier households, and could increase demand and inflation. The government previously ruled out such a cut, with Chalmers telling parliament last week it was “not something we have been considering”.
