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Government weighs extending fuel excise cut to ease cost-of-living pressures

Published July 28, 2026 at 9:02 PM UTC

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The Australian government is considering a last-minute extension of the temporary fuel excise cut, a move that would keep petrol prices lower for households and businesses. The excise reduction, introduced in March 2022, slashed the fuel tax by 22 cents per litre and is scheduled to expire in September. A senior minister hinted at the possibility of an extension, citing ongoing inflation pressures. The decision involves a tradeoff between providing relief to motorists and losing billions in government revenue that could fund other priorities. Economists are divided: some argue the cut is a blunt tool that benefits all drivers regardless of need, while others say withdrawing it now would hurt families already struggling with high living costs. The government faces a tight fiscal environment, with debt exceeding $900 billion. Any extension would add to budget deficits. The opposition has demanded the cut be made permanent, accusing the government of playing politics. Meanwhile, petrol prices have been volatile, influenced by global oil markets. If the cut expires, fuel prices could jump by about 20 cents per litre immediately. The government is expected to announce its decision in the coming weeks. For now, drivers are watching fuel bowsers and wondering what comes next.