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The tax on each litre of petrol and diesel has been cut by 26 cents for three months – a reduction intended to be passed onto motorists – as the Federal Government announces a halving of the fuel excise.
The tax on every litre of petrol and diesel will drop by 26.3 cents for three months from Wednesday in a bid to slow the surge in fuel prices amid prolonged conflict in the Middle East.
It is up to retailers to pass the cut in the fuel excise – which has been halved from 52.6 cents per litre to 26.3c/L – onto customers, once stock purchased at the higher price is sold.
Prime Minister Anthony Albanese announced the changes today following a National Cabinet meeting with leaders from each state and territory, with Treasurer Jim Chalmers adding that regional Australians were “front of mind” in the decision.
It is a backflip on statements in early March by Chalmers that the Federal Government would not cut the fuel excise.
The fuel excise is a flat rate tax included in the price of every litre of fuel sold in Australia. The price is indexed and adjusted twice each year in line with inflation.
The latest data from the Australian Institute of Petroleum lists the average price of 91-octane regular unleaded petrol last week as 253.4 cents per litre, and the average price of diesel at 310 cents per litre.
Albanese said the excise cut would reduce the cost of filling a 65-litre tank by about $19.
The cut to the excise is estimated to cost the budget $2.55 billion – pending higher or lower fuel demand that will affect the exact number – with economists warning it will further increase inflation.
Alongside the fuel excise cut, the Federal Government will drop the Heavy Vehicle Road User Charge – a tax on diesel of 32.4 cents per litre for truck and bus drivers – to zero for three months.
Victoria and Tasmania announced in recent days that public transport would temporarily be free as fuel prices impact commuters. The Prime Minister said he was supportive of these measures.
Max is the News Publishing Coordinator for Drive. He enjoys creating engaging digital content, including videos, podcasts, interactive maps, and graphs. Prior to Drive, he studied at Monash University and gained experience working for various publications. He grew up playing Burnout 3: Takedown on the PS2 and was disappointed when real life car races didn’t have the same physics.
