Australian motorists will continue to receive fuel excise relief after the Federal Government confirmed the temporary fuel excise discount will be extended until July 31, 2026.
The measure was originally announced on April 1 as a three-month response to rising fuel prices and had been due to expire on June 30. The extension comes despite no continuation of the discount being announced in the Federal Budget handed down on May 12.
Reduced fuel excise discounts in Australia
The fuel excise relief has been extended, but the level of support will be reduced. From July 1, the temporary fuel excise discount will drop from 26.3 cents per litre to 16 cents per litre.
| Old discount (April-June 2026) | 26.3¢/L + 5.7¢/L (state GST relief) |
| New discount (until July 31, 2026) | 16¢/L |
The discount is currently scheduled to end completely on August 1, at which point the full fuel excise rate of 52.6 cents per litre will once again apply.
The government is also extending support for the transport sector through the Heavy Vehicle Road User Charge. The charge will increase to 16 cents per litre (from zero since April 2026), half of its normal 32.4 cents per litre rate, until August 1.
How much can drivers save on fuel?
Prime Minister Anthony Albanese said the extension would continue delivering meaningful savings for motorists.
“The 16 cents a litre extension to the fuel tax cut that we’ve announced today will reduce the cost of a 65-litre tank of fuel by around $11,” he told Sky News.
Why was the discount introduced?
The temporary fuel relief package was designed to offset the impact of soaring fuel prices on motorists, businesses and the broader transport sector.
According to the government, the measures were introduced amid tensions between the conflict between the US and Iran, which disrupted global oil markets and raised concerns about crude oil shipments through the Strait of Hormuz since March.
The Strait of Hormuz is one of the world’s most important oil shipping routes, carrying roughly 20% of global oil supplies.
More extensions still possible
The government has not ruled out extending the fuel tax relief again, as tensions between the US and Iran are not over yet.
“We’ll continue to do what we can to shield Australians from the worst impacts of this conflict, including securing additional fuel from our partners,” Mr Albanese told Sky News.
Meanwhile, Energy Minister Chris Bowen revealed Australia currently holds 44 days of petrol reserves and 32 days of jet fuel reserves. This is the country’s highest fuel stock levels since 2023.
Higher fuel prices boost EV sales
Higher fuel costs are also helping drive interest in electric cars. In May 2026, the Tesla Model Y became the first EV to top Australia’s overall monthly sales charts, finishing as the country’s best-selling vehicle.
Its success contributed to EVs achieving a record 19.9% market share during the month, representing a 111.6% YoY increase compared with May 2025.
Bottom line
Australia’s fuel excise discount will remain in place until July 31, giving motorists another month of savings at the bowser. With fuel prices remaining a concern, the extension provides short-term relief while broader transport and energy trends continue to evolve.
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