DEPUTY MANAGER OF OPPOSITION BUSINESS
21 September 2026
CUTTING THE FUEL TAX IN HALF WITH THE COALITION’S FUEL PRICE SHIELD
The Coalition will introduce the Fuel Price Shield, an automatic safeguard designed to reduce the impact of major global oil price shocks on Australian families and businesses meaning they will pay less at the pump.
Under the Fuel Price Shield, fuel excise would automatically be halved when the two-week average closing price of Brent crude is above US$100 a barrel.
When triggered, the measure is estimated to reduce the tax on fuel by around 27 cents a litre, equivalent to around $15 on a typical tank of fuel.
In addition, the 32-cent-a-litre heavy vehicle road user charge would be set to zero, giving truckies significant direct relief and households and businesses additional indirect relief by lowering prices.
Kevin Hogan said sharp rises in global oil prices were flowing quickly through to household and business costs in Page.
“Fuel is not a luxury. Families need it to get to work, take the kids to school, and businesses need it to keep their businesses running,” Kevin Hogan said.
“When global events send oil prices through the roof, families should know there is a clear automatic safeguard in place. In the middle of a fuel crisis it makes sense to provide targeted fuel tax relief.”
“The Fuel Price Shield would provide certainty. When a serious oil shock hits, the tax comes down automatically. When oil prices return to more normal levels, the ordinary rate is restored.”
“For a family filling a typical tank, the Fuel Price Shield would mean around $15 staying in their pocket instead of going in tax.”
“In regional Australia you cannot just decide to stop driving. People often travel long distances for work, school, medical appointments and the weekly shop.”
“Higher fuel prices also flow through the entire economy. They increase the cost of moving food, freight and supplies around our country.”
“The Fuel Price Shield is designed to provide temporary relief when international oil markets experience an exceptional shock, while ensuring the ordinary arrangements return once that shock has passed.”
HOW THE FUEL PRICE SHIELD WILL WORK
The Fuel Price Shield would automatically halve the fuel excise and zero out the heavy vehicle road user charge when the two-week average closing settlement price of Brent crude rises above US$100.
All changes would apply from the Monday after the trigger date.
The Fuel Price Shield would initially operate until the earlier of:
- the eight-week average Brent crude price falling below US$100 a barrel; or
- three months passing since the Fuel Price Shield was triggered.
At that point, the temporary excise reduction would end unless the government, following a review of global oil prices and market conditions, decided to extend it.
The policy would also temporarily reduce the heavy vehicle road user charge to zero, giving our truckies an even bigger benefit than the excise reduction.
The rate of heavy vehicle road user charge will be reduced from 32.4 cents per litre to zero cents per litre, meaning truck and bus operators will be able to claim the full 26.85 cents per litre value of the fuel excise back as a Fuel Tax Credit, which can then be used to offset their GST obligations when lodging their Business Activity Statements.
Coalition analysis indicates the Fuel Price Shield would have been triggered only twice in the past five years, during the major global oil price shocks of early 2022 and March 2026.
During those two periods, the Fuel Price Shield would have operated for approximately 6 months and 3 months, respectively.
The policy is estimated to cost around $950 million for each month it is activated.
The current Budget assumes oil prices return to around US$80 a barrel by mid-2027.
The Coalition has already announced a plan to more than double minimum stockholding requirements to 60 days for critical fuels and establish an $800 million Australian Fuel Security Facility to support more than one billion litres of new fuel storage capacity, with a focus on diesel.
The Coalition will also establish a daily public fuel dashboard so Australians can see fuel supply levels in real time, support investment in new and prospective refining capacity through the Fuel Security Services Payment, and remove barriers to increasing Australian fuel supply.
Together, these measures are designed to deal with both sides of the problem: The Fuel Price Shield provides temporary relief when global oil prices spike, while the Coalition’s fuel security plan increases the amount of fuel and storage available in Australia and strengthens the resilience of domestic supply chains.
The Fuel Price Shield and stronger fuel security are part of our plan to fix our economy and protect our way of life.
ENDS
Media Contacts:
Kevin Hogan: 0428 291 307
Immy Cook: 0419 821 142