Five weeks in, and the government has made its biggest move yet. The fuel excise has been halved, new legislation is being introduced to give the government powers to direct supply, and the PM has addressed the nation. Diesel has broken $3 a litre nationally. The ACCC has received more than 3,000 complaints in a single month. Here is what changed this week and what it means for your business.
Fuel excise halved from 1 April
The federal fuel excise has been cut from 52.6 cents per litre to 26.3 cents per litre for three months, effective 1 April. The measure applies to both petrol and diesel and is expected to reduce pump prices by approximately 26 cents per litre once it flows through. The heavy vehicle road user charge has also been suspended for three months, providing direct relief to the freight and logistics sector.
For operators, this should bring some relief at the bowser for your customers. But the excise cut reduces the tax component of the pump price. It does not change the wholesale cost of fuel, which remains at record levels with national average diesel now at $3.10 per litre and petrol at $2.53. It also does not resolve the distribution and allocation challenges that are still leaving independent operators without product. Lower pump prices may drive increased demand, which could put further pressure on an already strained system. The ACCC has made it clear they expect the savings to be passed through in full.
Government to underwrite fuel purchases
This is potentially the most significant development of the week for the supply side of the crisis. The PM announced that the federal government will underwrite the purchase of additional fuel cargoes, with legislation introduced to facilitate this support. Energy Minister Bowen explained that while international fuel cargo is available, it is becoming increasingly expensive and risky for suppliers to secure in a volatile market. The underwriting is designed to give Australian importers the confidence to lock in additional shipments that they might otherwise pass on.
If this works as intended, it should increase the total volume of fuel entering the country, easing pressure at terminals. For independent distributors and wholesalers who have been struggling to secure product, more fuel in the system means more opportunity to fill orders. For independent retailers, it means a better chance of your distributor being able to supply you. The detail of the legislation is still emerging and we will provide updates as it becomes clear.
New powers to direct fuel supply
Alongside the cargo underwriting, the government is introducing legislation to give it new powers over fuel distribution. This builds on the existing crisis infrastructure: the Fuel Tsar, state coordinators, weekly stockholding reporting, and the NSW emergency declaration powers we covered last week. The direction of travel is clear. The government is moving from monitoring and coordinating to having the legal authority to direct where fuel goes if the market cannot do it efficiently on its own.
For independents, this is a double edged development. On one hand, powers to direct supply could mean fuel is pushed to underserved areas and independent operators who have been missing out. On the other, government directed allocation is untested and there is no guarantee the independent channel will be prioritised over major branded networks. How these powers are used will matter more than the fact they exist. We will be advocating for independent distributors and retailers to be recognised as essential parts of the supply chain in any allocation framework.
States are also moving independently. Western Australia has activated emergency powers under the Fuel, Energy and Power Resources Act to compel fuel suppliers and distributors to hand over supply chain data, after only three of six major suppliers responded to a voluntary request for information. Premier Cook was blunt: “In some cases, we don’t know where the fuel is.” Meanwhile, the Northern Territory has revived its Price Exploitation Prevention Act, a law that has not been used since 1949, giving it powers to intervene directly on fuel pricing. The message from the states is clear: if the industry will not provide transparency voluntarily, governments will compel it.
What to watch this week
The PM addressed the nation on the fuel crisis this week, a rare step that signals the government sees this as a defining issue. Brent crude has climbed back above US$116 a barrel with no sign of the Middle East conflict easing. The excise cut runs until 30 June, but reinstating it on top of elevated wholesale costs would create another shock. The ACCC has received over 3,000 reports from consumers and businesses in March and has written to major fuel retailers demanding pricing transparency. And mid April remains the critical window: if supply disruptions continue beyond then, the reserve buffer becomes dangerously thin.
Keep documenting your supply experiences. If you are being refused product, receiving reduced allocations, or seeing pricing from your supplier that does not make sense, let us know. Your evidence is what we take to government and media on your behalf.