SYDNEY, AUSTRALIA – Fuel Prices to Rise as Excise Increases Australians will be paying more at the pump as the fuel excise on petrol and diesel increases from 50.8 to 51.6 cents per litre, effective August 4.
This marks the second increase this year, prompting calls to replace the controversial tax with a national road user charge.
The increase, which is expected to hit low-income earners and families hardest, will be passed on to consumers by fuel retailers.
According to the Victorian Automobile Chamber of Commerce (VACC), this “hidden tax” will disproportionately affect those who rely on their vehicles for work and essential travel.
The VACC argues that the fuel excise is built into the price displayed at the pump, making it difficult for consumers to understand the true cost of fuel.
Motorists are then forced to pay the 10 per cent Goods and Services Tax (GST) on top of the fuel excise, effectively creating a tax on a tax.
Research by the Australian Automobile Association (AAA) found that only 57 per cent of fuel excise revenue in the decade to the 2022-23 financial year was reinvested in public transport and roads.
Meanwhile, Australian Government revenue from fuel excise is expected to increase to about $17.7 billion in the 2026-27 financial year.
The VACC is among several auto industry organisations advocating for a national road user charging system, which would ensure fair contributions from all road users and avoid a patchwork of state-based policies.
As more Australians transition to hybrid, plug-in hybrid, and battery-electric vehicles, fuel excise revenue is expected to decline, creating pressure on the government to develop alternative funding mechanisms for road infrastructure.
With fuel prices on the rise, motorists are urged to consider the true cost of fuel and to demand transparency from the government.