Petrol Prices Top $2 a Litre as Fuel Excise Relief Ends 2026

Petrol prices are on track to top $2 a litre across Australia as the government's fuel excise relief officially ends, adding financial pressure to motorists already grappling with rising living costs. The temporary 16-cent per litre discount, introduced earlier this year, will expire on August 3, and energy minister Chris Bowen has confirmed no extension is planned.

Why Are Petrol Prices Rising?

The end of the fuel excise reduction means the full 32-cent per litre excise will be reinstated, immediately increasing wholesale prices by 16 cents. Service stations typically pass on these increases within days, and with global oil prices already elevated due to geopolitical tensions, the impact is amplified.

According to MotorMouth data, unleaded petrol already exceeds 200 cents per litre in several capitals, including Canberra at 205.6 cents, Darwin at 204.4, and Hobart at 200.5. Once the excise increase is fully passed on, prices could surge past 210 cents in many areas.

Diesel Prices Hit Harder

Diesel is facing even steeper hikes, with Melbourne seeing 242.7 cents per litre—up 68 cents from its June low. If retailers pass on the full 16-cent increase, diesel could exceed 250 cents per litre in most capitals, hitting trucking and transport industries particularly hard.

Impact on Households and Businesses

For a typical 55-litre tank, the 16-cent increase adds $8.80 per fill-up. Weekly commuters could face an extra $35–$45 per month, while businesses reliant on fuel-intensive logistics will see margins squeezed. The Australian Automobile Association has called for greater transparency in fuel pricing to help consumers find the best deals.

What Can You Do to Save on Fuel?

• Use fuel price comparison apps like MotorMouth or FuelCheck to find the cheapest stations.
• Drive smoothly and maintain proper tyre pressure to improve fuel efficiency.
• Consider carpooling or public transport for daily commutes.
• Look for loyalty programs or cashback offers at major chains.
• Plan your trips to combine errands and reduce unnecessary driving.

Government Response and Future Outlook

Energy minister Chris Bowen stated, "Our policy decision is clear," indicating no further relief is forthcoming. However, analysts suggest that if global oil prices remain volatile due to tensions in the Strait of Hormuz, the government may face pressure to intervene again. For now, motorists should brace for higher costs at the pump.

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