Now lawMoney & Tax Introduced in the House of Representatives, 31 Mar 2026

Petrol and diesel tax was cut in half for three months

War in the Middle East sent fuel prices soaring. This law halved the tax on fuel from 1 April to 30 June 2026. It let the Treasurer, the minister in charge of the economy, cut it further. It also let the Transport Minister drop the road charge for trucks.

Official name: Treasury Laws Amendment (Fuel Excise Relief) Bill 2026

Who it affects

• Drivers: The tax built into the price of each litre of petrol and diesel was halved for three months.
• Fuel refiners and importers: They paid half the usual tax on fuel made or brought in during the cut.
• Truck operators: The government planned to drop their road charge to zero for three months and put off the next rise.

War pushed up pump prices

In early 2026, fighting in the Middle East pushed up the price of fuel around the world. Australians paid much more at the pump.

Every litre of fuel made in Australia carries a tax called fuel excise. Fuel brought in from overseas pays a matching tax at the border. Both go up twice a year, in February and August, in line with prices.

On 30 March 2026, the Prime Minister said the government would halve these taxes to ease the pressure. This law made that promise happen.

It changed three laws. They were the Excise Tariff Act 1921, the Customs Tariff Act 1995 and the Fuel Tax Act 2006. These set the tax on fuel made here, the tax on fuel brought in, and fuel tax refunds for businesses.

Three months at half tax

The first part of the bill cut the tax on fuel by 50 per cent from 1 April 2026 to 30 June 2026. It covered petrol, diesel and similar fuels made from oil.

The cut was taken off the rate set in February 2026. That was 52.6 cents a litre for petrol and diesel. The new rate was $0.263 a litre. Other fuels got matching cuts.

The cut applied to fuel made in Australia during those months. It also applied to fuel made earlier if the tax had not yet been paid by 1 April.

For fuel from overseas, it covered fuel whose tax had not yet been worked out by 1 April.

Say you fill up a car with 50 litres of petrol. With the tax cut, the tax in that fill came to about $13.15. Whether the full saving reached you depended on fuel sellers passing it on.

Full tax returned in July

From 1 July 2026, the tax went straight back to the full rate. It went back to the level it would have been at with no cut.

The law did not change the normal price rise in August 2026. The full rate keeps rising twice a year as before.

The Governor-General signed the law on 1 April 2026, the same day the cut started. The Governor-General is the King's stand-in in Australia. Fuel companies could only gain from this timing, because a lower tax was the only change.

Treasurer can cut it further

The second part of the bill let the Treasurer make the cut bigger between 1 April and 30 June 2026. The Treasurer does this with a written rule that has the force of law.

Normally during the cut, fuel was taxed at 50 per cent of the full rate. The Treasurer could set a lower share, such as 45 per cent. That would mean a 55 per cent cut to the tax.

The same lower share would apply to fuel from overseas. So local fuel and fuel from overseas stay taxed the same.

The Treasurer used this power on 2 April 2026. The Treasurer set a cut of 60.9 per cent for the three months. This is reported in the government's notes for a later bill, called Fuel Excise Relief No. 2.

Road charge for heavy trucks

Businesses that use fuel for work can claim some fuel tax back. These are called fuel tax credits.

Heavy trucks on public roads must pay a road user charge. It is taken out of those credits. It helps pay for roads.

The government said it would cut the road charge to zero for three months from 1 April 2026. It also said it would put off the next planned rise by six months.

The third part of the bill gave the Transport Minister room to change the charge more quickly. Normally the minister must ask the public for views for at least 60 days before raising it. The minister can also only raise it once a year for each type of fuel.

Until 30 June 2027, the minister can set the charge for 2025-26 and 2026-27 without that 60-day wait for views. The minister can also change it more than once a year. The minister can use a set formula to adjust it.

Start date

The bill went to the House of Representatives on 31 March 2026. Both houses passed it that same day.

It was signed into law on 1 April 2026 and became Act No. 22 of 2026. The tax cut ran from 1 April to 30 June 2026. The road charge powers last until 30 June 2027.

A second law, the Fuel Excise Relief No. 2 bill, was brought in later in 2026.

How they voted

Its journey through Parliament

Official sources

• Bill page on aph.gov.au
• Text of the bill
• Explanatory memorandum

Open the full interactive page