Australia Scraps 60% Fuel Excise Discount on August 2

The Parliament of Australia will scrap a 60% fuel excise discount at midnight on August 2, 2026. The relief measure was originally introduced in April to counter a surge in oil prices triggered by the US-Iran war and the resulting disruption of oil flows through the Strait of Hormuz. The discount had lowered the fuel excise rate from 52.6 cents to 20.6 cents per litre.

Ending the measure is expected to increase petrol prices by approximately 16 cents per litre. Following this change, the full road user charge for heavy vehicles will return to pre-war rates starting August 3.

The Reserve Bank of Australia estimated that the initial excise cut reduced headline inflation by 0.5 percentage points. However, the government estimates the measure resulted in a total revenue loss of A$2.9 billion.