Australia Cuts Fuel Tax as ACCC Probes Energy Giants Over Rural Shortages

The Australian Government has responded to mounting fuel supply pressures with a comprehensive package of emergency measures, including halving fuel excise for three months while the competition regulator investigates alleged anti-competitive behaviour by major energy companies.

Prime Minister Anthony Albanese announced on Monday the federal government will halve fuel excise on petrol and diesel for three months, reducing costs by 26.3 cents per litre and saving motorists nearly $19 on a typical 65-litre tank.

Emergency Response to Global Crisis

The measures come as Australia grapples with severe fuel shortages and price spikes triggered by the ongoing conflict in the Middle East. As of 21 March 2026, Australia’s fuel reserves contained 38 days’ worth of petrol and 30-day supplies each of diesel and jet fuel.

Average diesel and petrol prices in Australia’s five largest cities rose 10 percent and 8 percent, respectively, in the week to 25 March, according to the Australian Competition and Consumer Commission (ACCC).

The temporary measure is part of a $2.55 billion package aimed at easing cost-of-living pressure and stabilising supply, with the excise cut running from 1 April to 30 June 2026.

ACCC Launches Investigation into Energy Giants

In a significant parallel development, the ACCC has launched an enforcement investigation into allegations of anti-competitive conduct by each of the major fuel suppliers, Ampol Ltd, BP Australia Pty Ltd, Mobil Oil Australia Pty Ltd, and Viva Energy Australia Pty Ltd.

The ACCC received reports concerning diesel availability to independent wholesalers and distributors servicing regional and rural Australia, and this investigation will assess the alleged conduct.

ACCC Chair Gina Cass-Gottlieb said the regulator was taking the unusual step of publicly announcing an active investigation. “It is not our usual practice to publicly announce investigations, but given the significance of the issue, the ACCC is confirming this enforcement investigation. We recognise the widespread concerns held by consumers, businesses and farmers about fuel pricing and supply issues arising during the Middle Eastern conflict,” she said.

Enhanced Penalties and Monitoring

The government will double maximum penalties under the Competition and Consumer Act 2010 for false or misleading conduct and cartel conduct, raising the cap to $100 million per offence. This follows a 2022 increase to $50 million, itself five times the previous maximum.

The ACCC is now providing weekly updates on fuel price monitoring during the current Middle Eastern conflict, including movements in crude oil prices and domestic wholesale and retail fuel prices in Australia’s capital cities and more than 190 regional locations.

Impact on Regional Australia

The investigation has particular significance for rural and regional communities, where fuel supply disruptions have been most acute. In New South Wales, Premier Chris Minns reported 107 stations without diesel and 42 completely out of fuel as of mid-March, with similar issues hitting regional Queensland, Western Australia and Victoria, where farmers face diesel shortages critical for machinery and transport.

The government will also reduce the Heavy Vehicle Road User Charge to zero for three months to help truckies continue their vital work, and defer the next scheduled increase in the Heavy Vehicle Road User Charge by six months.

Both Mr Albanese and Dr Chalmers warned fuel companies against absorbing the tax cut rather than passing it on, calling on retailers to “do the right thing”, with Dr Chalmers saying the competition watchdog would be watching bowser prices closely to ensure Australians were “not taken as mugs”.

Supply Security Measures

The government has also released 20 per cent of Australia’s petrol and diesel fuel reserves, targeted at regional areas, and engaged with international partners to keep supply flowing, including securing a supply agreement with Singapore.

Prime Minister Albanese said supply disruptions were ongoing, but shipments to Australia had so far kept pace with demand, with all fuel shipments scheduled to arrive up to 30 March delivered, while in April, six expected shipments had been offset by nine additional cargoes.

The comprehensive response demonstrates the federal government’s recognition of fuel security as a critical national issue, while the ACCC’s investigation signals zero tolerance for anti-competitive behaviour during a crisis affecting essential services across the country.