The Australian government has extended the fuel excise reduction for another month, but the discount will be halved from July 1. The 32-cents-per-litre cut, introduced in April to combat rising fuel costs amid international tensions, will drop to 16 cents per litre for both petrol and diesel until August 2.
Prime Minister Announces Tapered Relief
Prime Minister Anthony Albanese confirmed the extension, stating it would provide continued support for households under financial strain. "Today's decision recognises that despite the welcome and substantial drop in the price of petrol recently, we know people are still under pressure," Albanese said. He noted that the reduced discount would lower the cost of a 65-litre tank of fuel by approximately $11.
The Heavy Vehicle Road User Charge will also be reduced by 16 cents per litre during July. The combined measures are expected to cost the federal budget around $400 million.
Government Aims to Avoid Panic Buying
The government explained that the phased reduction is designed to prevent a rush of motorists filling up before the discount ends completely. "By tapering off the fuel tax cut, this will also help to manage demand at service stations towards the end of the month," the government stated.
Treasurer Jim Chalmers said the extension would ease the transition as fuel assistance is gradually withdrawn. "This extra month of fuel discount will help Australian motorists and businesses with the cost of living as this support tapers off," Chalmers said. "On top of our other cost-of-living help, including more tax cuts for every taxpayer, this will make a meaningful difference when it comes to helping Australians make ends meet."
Fuel Markets Stabilising
The announcement comes as global oil prices decline following a ceasefire agreement between the United States and Iran. Average unleaded petrol prices in Sydney and Melbourne are currently around $1.60 per litre, while diesel remains higher at about $2 per litre.
Energy Minister Chris Bowen reassured Australians about fuel supplies, revealing that 51 ships carrying petrol, diesel, jet fuel, and crude oil are en route to Australia. He stated that the country has its second-highest fuel stockpile since 2023. "There continues to be uncertainty internationally, but that will continue to be the approach of the Albanese government, a calm approach," Bowen said. "Working carefully with our trading partners, with the private sector, with all Australians to ensure the supply of fuel to Australia is as good as it possibly can be in these challenging international circumstances."
