Australia's fuel excise tax returns to full rate on August 2, 2026

Herz — World Desk · 1 August 2026 at 20:44 · 30s summary · 3 min read

What we know

The Australian government has ended its fuel excise tax reduction — a tax levied per litre of petrol and diesel — at midnight on August 2, 2026. Treasurer Jim Chalmers, who confirmed the end of the measure, stressed that it was never designed to be permanent.

Since April 1, 2026, this tax had been cut from 52.6 to 20.6 cents per litre, a discount of 32 cents per litre on wholesale prices. The measure was then extended to August 2 at an intermediate rate of 36.6 cents per litre, reducing the discount to just 16 cents per litre.

Coinciding with the end of the reduction, the tax has undergone its semi-annual inflation indexation. According to the Australian Tax Office, the rate now stands at approximately 53.7 cents per litre.

Context

The excise cut was part of a broader set of economic support measures adopted by the federal government in response to the oil crisis caused by the Strait of Hormuz closure.

The measure was projected to cost Australian taxpayers $2.55 billion. Economists warned that it could worsen inflation.

Impact on petrol prices