How much has the fuel excise been cut in total?

The total fuel excise cut is 32 cents per litre, down from the original rate of 52.6c/L to an effective rate of 20.6c/L. The first cut (26.3c/L) was the federal government halving the excise on 1 April. The additional 5.7c/L cut was agreed on 2 April, funded by states and territories forgoing extra GST revenue from higher fuel prices.

How much will I save on a tank of fuel with the 32 cent excise cut?

On a 65-litre tank, the combined 32c/L excise cut plus the GST effect saves nearly $23 per fill. That's up from the original $18.80 saving under the 26.3c/L cut alone. The exact saving depends on how quickly and fully retailers pass on the additional reduction.

Where does the extra 5.7 cents per litre come from?

Higher fuel prices generate extra GST revenue for state and territory governments, because GST is 10% of the retail price. States and territories agreed to forgo an estimated $400 million of that windfall through to 30 June, and the Commonwealth is using it to fund a further 5.7c/L excise reduction.

When does the further fuel excise cut take effect?

The agreement was reached on 2 April 2026 and the PM's media release states the combined cut runs from 1 April to 30 June 2026. The additional 5.7c/L will flow through to pump prices as wholesalers and retailers adjust pricing in the days following implementation.

States Fund Further 5.7c/L Fuel Cut — Total Saving Now 32c/L

All eight state and territory leaders agreed on Thursday 2 April to fund a further fuel excise cut, bringing the total reduction to 32 cents per litre through 30 June 2026.

Combined with the federal government's halving of the fuel excise that took effect on 1 April, the full package now saves drivers nearly $23 on a 65-litre tank (Source: PM media release, 2 April 2026).

What happened

When National Cabinet met on Monday 30 March, the federal government announced it would halve the fuel excise from 52.6 to 26.3 cents per litre for three months. But there was an unresolved question: what should states and territories do with the extra GST revenue they were collecting from higher fuel prices?

Higher pump prices mean higher GST, since GST is 10% of the total retail price (including excise). That windfall was estimated at around $400 million through to 30 June.

National Cabinet couldn't agree on how to return that money to consumers. Queensland's Treasurer David Janetzki initially preferred targeted cost-of-living measures rather than a blanket fuel cut, and Victoria also disagreed with other states on the approach (Source: SBS News).

On Thursday morning, the Council for the Australian Federation (the premiers and chief ministers, without the PM) resolved the disagreement. All states and territories agreed to return the $400 million GST windfall to the Commonwealth, which would use it to fund a further 5.7 cent per litre excise cut — an additional 10.9% reduction on top of the halving (Source: PM media release).

The numbers

	Original cut (1 April)	Further cut (2 April)	Combined
Excise reduction	26.3 c/L	5.7 c/L	32.0 c/L
Effective excise rate	26.3 c/L	20.6 c/L	20.6 c/L
GST effect (10%)	2.63 c/L	0.57 c/L	3.20 c/L
Max retail price impact	28.93 c/L	6.27 c/L	35.20 c/L
Saving on 65L tank	$18.80	$4.08	$22.88
Funded by	Federal budget ($2.55B)	State/territory GST (~$400M)	$2.95B total

The effective fuel excise rate drops from 52.6 c/L to 20.6 c/L — the lowest rate since excise indexation was reintroduced in 2014. The combined reduction runs through 30 June 2026.

$1 billion Economic Resilience Program

The PM also announced a $1 billion Economic Resilience Program providing interest-free loans to businesses hit hardest by fuel costs — specifically truckies, freight companies, and fuel and fertiliser producers (Source: PM media release).

This is particularly relevant given diesel pass-through has been lagging behind petrol. As of Day 2 of the excise cut, standard diesel had only seen a 30.8% pass-through (8.1c/L of the 26.3c/L cut), compared to 94.7% for U91. Rising global wholesale diesel costs are working against the excise relief. The interest-free loans are designed to help freight operators and fuel-dependent businesses absorb those costs while the excise cut flows through.

The program is part of a broader $6.15 billion package of support being brought forward to help Australian businesses affected by the Middle East conflict.

When will the extra saving hit the pump?

WA Premier Roger Cook, who led the state and territory discussions, said the change was expected to be implemented "almost immediately" by Treasurer Jim Chalmers (Source: ABC News).

In practice, the additional 5.7c/L will follow the same pattern as the original cut: wholesalers adjust their terminal gate prices first, then retailers pass it through at the pump. Based on our Day 1 and Day 2 tracking, the original 26.3c/L cut reached 95% pass-through for unleaded within just two days. The additional 5.7c/L is smaller, so it should flow through quickly once implemented.

What this means for our tracking

Our Day 1 and Day 2 pass-through analyses measured against the 26.3c/L cut, which was the only reduction in effect at the time. That data remains accurate.

Once the additional 5.7c/L cut is implemented, our future daily tracking will measure against the full 32c/L benchmark. We'll note clearly when the benchmark shifts so the numbers are comparable.

Key dates (updated)

1 April 2026 — Original 26.3c/L excise cut takes effect
2 April 2026 — States agree to fund further 5.7c/L cut (implementation imminent)
30 April 2026 — Victoria's free public transport ends
30 June 2026 — All excise cuts and Tasmania's free buses expire (unless extended)

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