Federal Fuel Excise Discount to Halve from July 1

The federal government will halve its temporary fuel excise discount from 32 cents to 16 cents per litre between July 1 and August 2 before ending the measure altogether. The Heavy Vehicle Road User Charge, which has been free since April, will increase to 16 cents per litre through August.

Background on the relief measures The 50 per cent discount was introduced on April 1 after strikes on Iran closed the Strait of Hormuz and drove global oil prices higher. It reduced fuel costs by 26.3 cents per litre. Petrol prices in most capital cities have since fallen about 90 cents per litre from their March peak and now sit below pre-conflict levels.

Diesel prices have dropped about $1 per litre but remain roughly 20 cents higher than before the conflict.

Extension details and cost Prime Minister Anthony Albanese said the additional month of the 16-cent discount will reduce the cost of a 65-litre tank by around $11. " — Prime Minister Anthony Albanese Treasurer Jim Chalmers said the extension will continue to ease price pressures alongside other cost-of-living measures.

The extension is expected to cost around $400 million.

Next steps for states State and territory governments will decide at national cabinet on Monday whether to maintain their contribution to the rebate using GST revenue. The government has also taken steps including boosting the Minimum Stockholding Obligation, granting new ACCC powers against price gouging, and creating the $7.5 billion Fuel and Fertiliser Security Facility.