A federal election is due to take place within two months, and Australia’s major political parties have already started to make promises to voters about policies they’ll introduce should they win power.
Just a day after the Australian government announced its 2025-26 Federal Budget, Opposition leader Peter Dutton has promised to halve the fuel excise tax should his party be elected.
Currently, the fuel excise is a tax of 50.8 cents per litre, which is applied nationally to all road transport fuel, including petrol, diesel and ethanol blends (E10 and E85).
According to Mr Dutton, the 25.4 cent per litre fuel excise will come into effect from the day he takes office as Prime Minister, and will last for 12 months.
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The Coalition claims this will save motorists who fill their vehicles with 55 litres of fuel per week approximately $720 for the year.
In its budget announcement earlier this week, the government projected fuel excise revenue will total $50.6 billion across the next three financial years, down 2.5 per cent on the current figures, largely due to an uptake in electric vehicles (EVs) and more fuel-efficient cars.
For context, the opposition says its 12-month excise cut will result in a $6 billion shortfall.
It’s not the first time the now-opposition has promised to cut the fuel excise in half, having done so from March 30, 2022 – while it was still in power – until September 28, 2022, despite losing office in May that year.
At the time, fuel prices had risen to averages of above $2 per litre in almost every metropolitan region.
While the Australian Institute of Petroleum reports the average price of petrol in the state capitals dropped to about $1.75 per litre in October last year, this has since increased to approximately $1.85 per litre.
According to the Australian Automobile Association (AAA), fuel is the second-biggest cost for local motorists, with its December 2024 quarterly report showing an average household spend of $91.89 each week.
Currently 77 per cent of the fuel excise revenue is spent on Australia’s road transport network, though bodies such as the AAA have called for it to be replaced – or at least supplemented – by a pay-per-kilometre road user charge.
“It is disappointing that Australians heard nothing tonight about the Government’s plan for a more affordable, sustainable, and equitable system for paying for our roads,’’ AAA managing director Michael Bradley said in response to this week’s budget.
The Australian Government is yet to call the federal election, which can take place no later than May 17, 2025.
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