Government extends fuel tax cut – with a catch

The cuts within the Treasury Laws Amendment (Fuel Excise Relief No. 2) Bill 2026 will commence from 1 July and run until 2 August. 

This comes after the government announced a half-price cut to the fuel excise until 30 June and a reduction of the Heavy Vehicle Road User Charge (RUC) to zero for three months. 

The new temporary fuel excise cut has been extended through July, but the discount has been halved from 32 cents per litre to 16 cents per litre. 

Meanwhile, the RUC, which has been free since April, will be adjusted to 16 cents per litre from July 1 until August 2, before returning to its standard rate of 32.4 cents per litre. 

At the National Cabinet, the prime minister outlined the Commonwealth’s one-month extension of the fuel excise cut and reached an agreement with First Ministers to continue their contribution on the same basis as the previous measure. 

Further, Chalmers noted that the extension to the fuel tax cut recognised that economic and fuel stability recovery would take time, and an extra month of fuel tax discount aimed to help Australian motorists and businesses with the cost of living. 

Overall, the cost of the extension to the fuel excise cut and the reduction in the RUC will be around $400 million. 

Despite the recent substantial drop in petrol prices, the government recognised that people are still under pressure. 

The extra month of fuel tax discount will help Australian motorists and businesses with the cost of living as this support tapers off, Chalmers said.

“Whether it’s slashing the fuel tax, slashing the road user charge for truckies or tax cuts for every taxpayer, we’re taking action to ease pressure on Australians,” he said.