Brace for more pain at pump

By the Editorial Team · Monday, September 21, 2026

The Australian government has no immediate plans to reduce the fuel excise despite rising global fuel price pressures caused by international supply disruptions. Opposition leaders have proposed temporarily halving the excise if oil prices stay above $100 per barrel, aiming to provide relief to consumers and industries while balancing inflation and budget concerns.

Australians should be prepared for further increases in fuel prices as ongoing international disruptions continue to threaten global fuel supply, with the federal government confirming it has no immediate plans to reduce the fuel excise.

The current average retail price for unleaded petrol stands at approximately $2.35 per litre across Australia, while diesel is averaging $2.80 per litre, according to recent data from Fuel Radar. These prices, however, remain below the peak levels seen in April, when unleaded petrol reached $2.60 and diesel approached $3.30 per litre.

Ben Fahimnia, chair of supply chain management at the University of Sydney, cautioned that despite Australia securing additional fuel shipments following the U.S. military action against Iran in March, this should not lead to complacency. He highlighted recent escalations involving Houthi forces near the Bab el-Mandeb Strait and attacks close to Riyadh airport in Saudi Arabia, which have exposed vulnerabilities in alternative supply routes after the closure of the Strait of Hormuz.

Although Australia does not import fuel directly from Saudi Arabia, it remains exposed to global supply chain disruptions due to its geographic position at the end of the distribution line. Fahimnia warned that Australians are likely to experience immediate impacts through increased fuel costs. If disruptions persist for several more months, the issue could evolve from concerns about price to questions over the country’s ability to maintain adequate fuel supply.

Currently, Australia holds approximately 41 days’ worth of petrol stocks, 31 days of diesel, and 32 days of jet fuel in reserve. Energy Minister Chris Bowen is scheduled to travel to Saudi Arabia to meet with his counterpart, Prince Abdulaziz bin Salman Al Saud, to discuss securing ongoing oil supplies.

Brent Crude oil prices have remained consistently above $100 US per barrel since mid-September, closing at $103 on Friday. In response, the opposition Coalition has announced that a re-elected Liberal-National government would halve the fuel excise by about 27 cents per litre if Brent Crude prices remain above $100 US for a continuous two-week period. The proposal also includes eliminating the heavy-vehicle road user charge for sectors such as agriculture and mining.

Opposition Leader Angus Taylor denied claims that the proposed excise cut would be inflationary, stating it would be fully funded through increased tobacco excise collections. The measure, he said, aims to redirect consumers from the illegal tobacco market back to legal sales. The excise reduction is planned as a temporary three-month measure and is estimated to cost around $950 million per month. Taylor described the policy as fiscally responsible and anti-inflationary.

Peter Khoury, spokesperson for the NRMA, acknowledged the merits of the Coalition’s policy, noting it could provide motorists and industries with pricing certainty. However, he emphasized the need to carefully assess the budgetary implications, given that fuel excise revenues currently contribute to road infrastructure funding.

Meanwhile, Prime Minister Anthony Albanese and Treasurer Jim Chalmers have so far ruled out any immediate adjustments to the fuel excise amid ongoing price pressures.

This article was reported by synthesizing coverage from multiple independent news outlets to present a balanced, unbiased account. Read about our editorial standards. Spotted an error? Let us know.