Fuel Excise Returns to 53.7 Cents as Treasurer Rejects Another Cut

Treasurer Jim Chalmers has poured cold water on hopes of a second fuel excise cut. He told ABC’s Insiders on 4 October 2026 that a repeat “is not something that we’ve been considering or discussing”. The comments matter because excise on petrol and diesel has been back at its full rate of 53.7 cents a litre since 3 August, fuel is driving inflation, and Parliament resumes sitting from Monday 12 October.

What Chalmers told Insiders

Host David Speers asked directly whether the government could lower fuel excise again. Chalmers said the government keeps “the full suite of policies under more or less constant review, but it’s not our intention.”

He defended the temporary relief delivered earlier in the year. He said the figures showed it worked and that it “took some of the sting off those higher petrol and diesel costs in our economy”. Speers noted that “many disagreed at the time” that the cut had lowered inflation.

“We are providing cost-of-living relief in other ways, and in a very responsible way as well,” he said. He also rejected the idea that the budget was the main cause of price pressures, saying: “Budget settings are not the primary driver of prices in our economy; there’s a whole bunch of other things going on.” The fuel excise line puts the government’s position on record before the mid-year update.

From 20.6c to 53.7c in about four months

The relief came in two stages, according to the ATO’s excise rate tables and a Department of Infrastructure fact sheet.

From 1 April to 30 June 2026, excise on petrol and diesel was cut by 60.9% to 20.6 cents a litre. The heavy vehicle Road User Charge, which applies to diesel used by trucks on public roads, was set to zero over the same period.

From 1 July to 2 August 2026, the relief was scaled back. Excise sat at 36.6 cents a litre, compared with the full rate of 52.6 cents at the time. The Road User Charge was 16.4 cents, down from 32.4 cents. The department’s fact sheet put the saving for heavy vehicles at about $65 per 400-litre tank under those settings.

On 3 August 2026 the relief ended. The full rate came back and was indexed at the same time, landing at 53.7 cents a litre.

How the August indexation was worked out

Fuel excise is indexed twice a year, in February and August, under existing law. No new vote of Parliament is needed for the rate to rise.

The August factor compares two quarterly consumer price index readings. According to the ATO and an Australian Border Force notice, the June 2026 quarter CPI of 102.31 was divided by the December 2025 quarter CPI of 100.32. That gives a factor of about 1.0198, rounded to 1.020.