Fuel Excise Halved: What This Means for Your Wallet
Federal fuel excise cut 26.3 cents per litre from April 1 2026. Calculate your tank savings, understand household budget impacts and government strategy ahead.
The Excise Cut at a Glance: 26.3 Cents Off Every Litre From Tomorrow
National Cabinet met today — 30 March 2026 — and confirmed the biggest single intervention in Australian fuel pricing since the Morrison government's temporary excise cut in 2022.
From **1 April 2026**, the fuel excise on petrol and diesel drops from **52.6 cents per litre to 26.3 cents per litre**. The cut applies for **three months**, running until **30 June 2026**. It covers all fuel types — unleaded, premium, diesel and E10.
The federal government estimates the measure will cost **$2.55 billion** over the quarter. The Heavy Vehicle Road User Charge has also been reduced to **zero** for the same period, which is designed to flow through to lower freight costs for food and essential goods.
:::info The excise cut takes effect at midnight tonight (31 March). You won't see lower prices immediately at every station — it depends on when each retailer's next fuel delivery arrives with the lower excise applied. Most stations should reflect the cut within 1-2 weeks. :::
How Much Will You Actually Save?
The maths is straightforward: **26.3 cents less per litre** on every fill.
Here's what that looks like across common tank sizes:
| Tank Size | Saving Per Fill | Monthly Saving (4 fills) | 3-Month Total | |---|---|---|---| | 40 L (small hatchback) | $10.52 | $42.08 | $126.24 | | 50 L (sedan / Corolla) | $13.15 | $52.60 | $157.80 | | 55 L (RAV4 / CX-5) | $14.47 | $57.86 | $173.58 | | 65 L (SUV / Ranger) | $17.10 | $68.38 | $205.14 | | 80 L (large SUV / LandCruiser) | $21.04 | $84.16 | $252.48 |
For a household running two cars — say a RAV4 and a Ranger — that's roughly **$31.57 per week** in savings, or **$378.72 over the three months**.
:::tip Use [FuelCalc](/) to calculate your exact trip cost with the reduced excise. Enter the post-cut fuel price to see what your next road trip or daily commute will actually cost. :::
Will Prices Actually Drop 26 Cents — Or Will Retailers Pocket the Difference?
This is the question everyone's asking, and history gives us a mixed answer.
When the Morrison government halved the fuel excise in March 2022, the ACCC found that **most of the cut was passed on to consumers** — but not immediately and not uniformly. Some stations dropped prices within days. Others took two to three weeks as they sold through existing fuel stock purchased at the old excise rate.
The ACCC has already warned that it will be monitoring retail margins closely during this period. Treasurer Jim Chalmers flagged that the government is prepared to **name and shame** any retailer engaging in price gouging.
There's a complication this time, though. Brent crude is trading around **US$104 per barrel** (down sharply from recent highs but still elevated) amid the ongoing conflict involving Iran and disruption to Middle East shipping routes. That means wholesale fuel costs are still rising. The excise cut will soften the blow — but it's unlikely to bring prices back to where they were six months ago.
:::warning Don't expect bowser prices to fall by exactly 26.3c overnight. The cut is on the excise component only. If wholesale prices rise further due to the Iran conflict, the net price drop at the pump could be less than 26 cents. :::
At current March 2026 average prices, here's a rough expectation:
| Fuel Type | Current Average ($/L) | Expected After Cut ($/L) | Net Price | |---|---|---|---| | ULP 91 | $2.33 | ~$2.07 | -26.3c | | E10 | $2.28 | ~$2.02 | -26.3c | | Premium 95 | $2.46 | ~$2.20 | -26.3c | | Premium 98 | $2.54 | ~$2.28 | -26.3c | | Diesel | $2.72 | ~$2.46 | -26.3c |
The Heavy Vehicle Charge Cut — Why Your Groceries Might Get Cheaper Too
Buried in the announcement is a measure that could have a bigger long-term impact than the excise cut itself: the **Heavy Vehicle Road User Charge has been reduced to zero** for three months.
This charge is normally **29.5 cents per litre** of diesel used by heavy vehicles. Trucks carrying food from farms to distribution centres, freight moving between states, and delivery vehicles all pay this charge. By zeroing it out, the government is effectively removing **55.8 cents per litre** of combined tax from diesel used by heavy vehicles (26.3c excise + 29.5c road user charge).
Diesel powers Australia's supply chain. Around **75% of domestic freight** moves by road. When diesel costs less, transport costs drop, and those savings can flow through to the price of groceries, building materials and manufactured goods.
Whether supermarkets actually pass those savings on is another question. But the mechanism is there, and the ACCC will be watching.
Queensland's Bold Play: The Taroom Trough and Australia's First New Oil Province in 50 Years
While the federal government focused on short-term price relief, Queensland Premier David Crisafulli has been pushing a much bigger conversation: **why is Australia so dependent on imported fuel in the first place?**
Australia currently imports roughly **90% of its refined fuel**. We have just **two operating refineries** — Ampol's Lytton refinery in Brisbane and Viva Energy's Geelong refinery in Victoria — with a combined capacity of about 230,000 barrels per day. Our total fuel consumption is around 850,000 barrels per day. The gap is enormous.
Crisafulli has publicly criticised the federal government's messaging on fuel supply. He has called the assurances that supply is stable as something that "belies Aussies' intelligence" and accused Canberra of withholding information from the public.
But beyond the political sparring, Queensland has taken concrete action. In late March 2026, the Crisafulli Government fast-tracked exploration rights in the **Taroom Trough** — a 750 square kilometre area near Miles in south-west Queensland, roughly the size of Singapore.
:::info Three companies — Omega TN, Tri-Star Stonecroft, and Drillsearch Energy — have been appointed as preferred tenderers. Drilling could begin as early as the second half of 2026, with oil extraction potentially starting by 2028. :::
The Taroom Trough is being described as Australia's first potential major oil province since the Bass Strait discoveries of the 1970s. If commercial quantities are found, any production would fall under the **Australian Market Supply Condition** — meaning domestic supply gets priority over exports.
Can Australia Actually Produce Its Own Fuel? The Numbers
The idea of Australian fuel self-sufficiency is appealing, but the reality is complicated.
Here's where Australia's fuel situation stands in March 2026:
| Metric | Figure | |---|---| | Daily fuel consumption | ~850,000 barrels/day | | Domestic refining capacity | ~230,000 barrels/day | | Import dependency | ~90% of refined fuel | | Operating refineries | 2 (Lytton QLD, Geelong VIC) | | Fuel reserves | ~34 days (petrol + diesel combined) | | Refineries closed since 2012 | 5 (Clyde, Kurnell, Bulwer Island, Port Stanvac, Westernport) |
Australia's two remaining refineries were built in the 1950s and 1960s. They're configured for different crude grades than what Australia produces domestically, and they're gasoline-heavy while Australian demand skews toward diesel. Even running at full capacity, they cover only about 20% of our needs.
The Taroom Trough exploration is exciting, but it's a **long-term play**. Even if commercial oil is found in 2026, production wouldn't meaningfully contribute to supply until the late 2020s at the earliest. Building new refining capacity would take even longer — a modern refinery takes 5-7 years to build and costs billions.
There are also alternative pathways being explored. The **Brisbane Renewable Fuels** project, backed by Wagner Corporation and Boeing, aims to produce over **750 million litres annually** of sustainable aviation fuel and renewable diesel using Australian feedstocks. Construction could begin in 2026.
The Bigger Picture: Why 34 Days of Reserves Keeps Defence Planners Awake
Australia's fuel reserves sit at roughly **34 days** of combined petrol and diesel supply. For context, the International Energy Agency recommends a minimum of **90 days** of net import cover. Australia has consistently failed to meet this benchmark.
The current crisis has exposed just how vulnerable Australia's supply chain is. A single disruption to shipping routes through the Strait of Hormuz — which carries roughly **20% of the world's oil supply** — can send Australian pump prices soaring within weeks.
The Lowy Institute, the Maritime Union of Australia, and multiple defence analysts have all warned for years that Australia's fuel insecurity is a national security risk, not just an economic one.
The government's Fuel Security Services Payment, introduced in 2021, pays refiners to keep operating during downturns. The trigger for this support was updated in March 2026 to reflect current market conditions. But it's a band-aid — it keeps existing refineries alive, it doesn't expand capacity.
Premier Crisafulli's push for domestic exploration represents a philosophical shift: instead of just managing our import dependency, actually reducing it. Whether the Taroom Trough delivers commercial quantities remains to be seen. But the conversation about Australia producing more of its own fuel has never been more urgent.
What About the 2022 Excise Cut — Did It Actually Work?
This isn't Australia's first temporary fuel excise cut. The Morrison government halved the excise from **March to September 2022** during the global energy price spike triggered by Russia's invasion of Ukraine.
Here's what the ACCC found when it reviewed that experience:
The cut **was largely passed on** to consumers — average retail prices dropped by about 22-24 cents per litre, close to the full 22.1 cent cut at the time. However, the pass-through wasn't instant. It took **two to three weeks** for most stations to fully reflect the lower excise.
When the cut expired in September 2022, prices **jumped immediately** — within 24 hours, most stations had added the excise back. The lesson: governments cut slowly but restore quickly.
The 2026 cut is larger in absolute terms (26.3c vs 22.1c in 2022) because the excise has been indexed to CPI twice since then. The three-month timeframe is the same.
:::warning Mark **30 June 2026** in your calendar. When the excise reverts to 52.6c/L, prices will jump overnight. If you're planning a major trip in July, consider filling up before the cut expires. :::
Five Things You Should Do Right Now
### 1. Don't Rush to Fill Up Tonight
The excise cut starts 1 April, but stations won't drop prices instantly. Fuel in their underground tanks was purchased at the old excise rate. Wait 1-2 weeks for deliveries at the new rate to flow through.
### 2. Use FuelCalc to Track Your Actual Savings
Plug your regular commute or upcoming trip into [FuelCalc](/) with the post-excise fuel price. Compare it to what you've been paying. The savings are real — but they'll vary depending on your vehicle and driving distance.
### 3. Watch for Price Gouging
If your local station doesn't drop prices within two weeks of 1 April, they may be pocketing the excise cut. Report suspected gouging to the ACCC or your state's fair trading body.
### 4. Plan Major Trips Before 30 June
The cut expires at the end of June. If you're planning school holiday travel or a winter road trip, aim to do it before the excise reverts. You'll save roughly **$17-21 per fill** compared to July prices.
### 5. Keep an Eye on the Taroom Trough
Queensland's oil exploration is the most significant domestic fuel development in decades. Results from initial drilling in late 2026 will tell us whether Australia has a viable path to reducing its 90% import dependency.
Tags: fuel excise cut, fuel excise, petrol prices, fuel crisis, domestic fuel production, Taroom Trough, Queensland oil, fuel security, cost of living, excise tax, David Crisafulli