The fuel excise has been cut, so why aren’t petrol and diesel prices cheaper?

The prices of petrol and diesel haven’t fallen today, with averages remaining at record levels across Australia – despite the federal government’s fuel excise cut coming into effect.

On Monday, the federal government announced it would halve the fuel excise on petrol from 52.6 cents per litre to 26.3 cents per litre from April 1, 2026, for a period of three months.

The cut would save $14.47 on a full tank of a Toyota RAV4 hybrid with its 55-litre fuel capacity. The RAV4 was the best-selling vehicle in Australia in 2025 that runs on petrol.

As part of a four-stage emergency fuel plan, the government also said it would abolish the 32.4 cents per litre diesel heavy vehicle road user charge applied to trucks with a gross vehicle mass (GVM) of more than 4.5 tonnes.

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Yet prices at the pump remain elevated, with motorists across the country seeing little immediate change.

“For some very busy metropolitan sites, it could be a few days,” Rowan Lee, chief executive of the Australasian Convenience and Petroleum Marketers Association, told The Guardian.

“In remote areas where they [have] low volume, it could be a week or two. As that fuel is replenished, the reduced excise will be applied to that fuel and passed through to motorists.”

This delay is because fuel excise is charged at the terminal gate before fuel is delivered to service stations, meaning most fuel currently in tanks was taxed at the higher 52.6 cent per litre rate.

It won’t be until fuel leaving terminals from today – benefiting from the lower 26.3 cents per litre rate – reaches service stations that prices are expected to fall.

The latest data from the Australian Competition and Consumer Commission (ACCC) shows the average price of petrol across capital cities was $2.53 per litre for the week ending March 27, 2026.

Darwin recorded the highest average at $2.57 per litre, while Perth saw the biggest four-week increase, rising by 92.2 cents per litre over the period to $2.57.

Diesel prices have climbed to an average of $3.03 per litre nationally for the same period, with prices as high as $3.29 per litre in some areas.

The federal government says it has empowered the ACCC to crack down on retailers failing to pass on the excise savings, following concerns prices have risen inconsistently across the country.

While price gouging isn’t technically illegal, Federal Treasurer Jim Chalmers said regulators should “come down like a tonne of bricks” on businesses doing the wrong thing.

The excise cut comes alongside broader measures to shore up fuel supply – particularly diesel – including unlocking domestic reserves, allowing lower fuel quality standards, and underwriting imports to ensure shipments continue arriving in Australia.

In a press release on March 28, Prime Minister Anthony Albanese said every fuel shipment scheduled to arrive in March had landed, while six of the 81 cargoes due in April had been “more than replaced”.

The government maintains fuel supply is stable and hasn’t triggered further stages of its emergency plan, which could include rationing under more severe conditions.

Federal Energy Minister Chris Bowen said on Tuesday, March 31 that 457 service stations nationally had run out of diesel, while 125 were out of unleaded petrol.

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