Fuel Security

Key points

The Commonwealth Government is responsible for fuel security and supply, while states and territories are responsible for distribution. AMEC will continue to monitor policy developments.

Recently announced

• From 2 August 2026 the Commonwealth Government’s temporary measures to mitigate the impact of fuel excise will end. The following measures will conclude, and correspondingly influence the price at the bowser:
  • A 30.4% reduction of full excise rates (for petrol and diesel, this is a 16 cent per litre reduction). Excise duty rates for fuel and petroleum products
  • Setting the heavy vehicle road user charge to 16.4 cents per litre. Rates – business.
• On 9 June, the Australian Government, in partnership with BP Australia, announced the purchase of approximately 50 million litres of diesel secured through the Government’s $7.5 billion Fuel and Fertiliser Security Facility. This cargo of diesel is destined for Perth.
• The new fuel shipment brings the total amount of additional fuel secured through the Government’s new Fuel and Fertiliser Security Facility to approximately 740 million litres of diesel and approximately 150 million litres of jet fuel across 18 additional shipments.
• Commonwealth Government fuel excise relief has been extended for one extra month, but at half the previous discount. So from 1 July to 2 August 2026, petrol and diesel will remain 16 cents per litre cheaper than normal, down from the earlier 32 cents per litre cut. The Heavy Vehicle Road User Charge will also be reduced by 16 cents per litre for the same period. 

Previously announced

• The Australian Government secured 40 million litres of additional diesel for Queensland, through an agreement between Export Finance Australia and independent supplier Freedom Fuels. The shipment is due to arrive in June for distribution to regional Queensland.
• The Australian Government announced the 2026-27 Federal Budget will include a fuel security package of around $10 billion which includes:
  • $7.5 billion to establish a fuel and fertiliser security facility via government-backed loans, equity, guarantees and insurance support for supply and storage of fuel and fertilisers;
  • $3.2 billion to establish a permanent government-owned Australian fuel security reserve of around 1 billion litres (and lifting the minimum stockholding obligation by about 10 days for every type of fuel). The reserve will focus on regional stockouts and supply constraints for essential users in the event of future supply crises.
  • $10 million (co-funded with states and territory governments) towards examining whether Australia needs additional fuel-refining capabilities.
• Obtained approximately 400 million litres of additional diesel using the Government’s new Strategic Reserve powers.
• Passed the Export Finance and Insurance Corporation Amendment (Strategic Reserve) Bill 2026: The Bill gives Export Finance Australia (EFA) new powers to underwrite additional fuel cargoes from international markets.
• Halved the fuel excise: the government will halve the fuel excise on petrol and diesel for three months – in addition to states and territories foregoing extra GST worth an estimated $400 million to be used to further reduce fuel excise. This will reduce the cost of fuel by a total of 32 cents per litre.

National Fuel Security Plan

The plan outlines a 4-stage approach on how governments will work together to keep Australia open and the economy moving. This includes:

1. plan and prepare
2. keeping Australia moving
3. taking targeted action
4. protecting critical services for all Australians.

Australia is currently at stage 2. Any shift in stage is subject to global circumstances and must be approved by the National Cabinet.

Useful links:

Additional fuel excise relief for the month of July

Contacts:

Fuel Supply Taskforce – PMC-FuelSupplyTaskforce@pmc.gov.au

Sash Pavic | Commonwealth Director | AMEC – sash.pavic@amec.org.au