Fuel pinch arrives sooner for some as discount halved

William Ton and Melissa Meehan | June 30, 2026

City drivers will soon feel the impact of a slashed fuel excise, while those in regional areas have up to a fortnight to prepare for a fresh spike in petrol prices.

The cost of fuel has plummeted to its lowest level since the Iran conflict began in February, but an increase is expected when the tax on fuel rises by about 16 cents per litre on Wednesday.

But just how much hip-pocket pinch motorists will feel depends on where they live – at least in the first fortnight.

“Regional Australians are likely to see the increases happen later, a week, maybe even in some instances two weeks, given how long it takes some regional service stations to sell through their stock and buy at new wholesale prices,” NRMA boss Peter Khoury told reporters on Tuesday.

“There will be some service stations in metropolitan areas where you will see some movement starting tomorrow.”

The excise rate – still reduced from the standard rate of 52.6c per litre – will remain in place until August 2 in an attempt to shield drivers from the impact of higher global oil prices.

It represents a halving of the 32c per litre discount put in place in April and equates to a saving of about $11 when filling up a car with a 64-litre tank.

Unleaded petrol prices were on Tuesday averaging $1.54 per litre in Melbourne, $1.55 in Brisbane and between $1.50 and $1.58 in Sydney. 

Mr Khoury said average unleaded prices on Wednesday could reach $1.70, while diesel is expected to come in about $1.95 per litre.

Victorian Automotive Chamber of Commerce chief Peter Jones warned drivers to get in early before the price rise flows through to the petrol bowsers.

“If you need fuel, it makes sense to fill up before the increase hits,” Mr Jones told AAP.

He reminded people to be respectful towards service station staff who shouldn’t be blamed for fuel prices they don’t control.

He said the situation on Wednesday would be different to the price spikes at the beginning of the Iran war, where some petrol costs reached $3 per litre because of the added effect of panic buying.

“Prices of fuel are generally lower at the moment, so the impact of that increase is probably going to be a lot less than it would have been a couple of months ago,” Mr Jones said.

As school holiday season begins, many families are choosing to stay closer to home because of the cost-of-living crunch.

Victoria, Queensland, the ACT and Northern Territory are on school holidays, while NSW, South Australia and Western Australia start their break on Monday. Tasmanian schools don’t start their mid-year break until July 11. 

The Australian Competition and Consumer Commission has written to fuel retailers, reminding them not to take advantage of excise changes to profit at the expense of consumers.

“We will not hesitate to take action if retailers make false or misleading statements about price movements or if there is evidence of anti-competitive behaviour,” commissioner Anna Brakey said.

Treasurer Jim Chalmers said the reduced fuel excise was providing cost-of-living help at a time when households were under financial pressure.

“Our fuel excise cut is part of the story, but also we’ve seen some welcome developments in the Middle East playing out in global oil markets,” he told reporters.

Mr Jones said the decision to taper the fuel excise relief, rather than end it immediately, was a sensible short-term measure that avoided a shock to many auto businesses already managing higher operating costs.