Highlights

  • On 13 October the Coalition added the cost of fuel to its question-time attack on the cost of living.
  • Behind that pressure sits a specific policy: a "Fuel Price Shield" that would automatically halve fuel excise whenever global oil prices spike.
  • The Fuel Price Shield is an opposition proposal, announced on 20 September 2026.
  • It is not law and would require a Coalition government and legislation.

The Coalition's plan would automatically halve fuel excise when Brent crude averages US$100 a barrel over two weeks. Here is how the trigger, the switch-off and the trucking changes would work, and what the Coalition says it would cost. Fuel prices are back on the political agenda in Canberra.

How the trigger would work

The cut would be about 27 cents a litre, or about $15 a tank. It would start on the Monday after the trigger is reached. The automatic design is the key difference from past fuel excise cuts, which were one-off decisions by the government of the day. Whether the trigger would be met at any given moment depends on a verified two-week average of Brent prices. A single day's price above US$100 would not, on its own, switch the cut on.

When the cut would switch off

The government of the day could choose to extend it. If the eight-week average dropped below US$100 after, say, six weeks, the cut would end then. The Coalition estimates the shield would have been triggered twice in the past five years: in early 2022, for about six months, and in March 2026, for about three months.

What it would mean for trucks and buses

Heavy vehicles are treated differently under the plan. Operators of trucks and buses currently pay a road user charge, which is deducted from the fuel tax credits they can otherwise claim. In effect, on that description, eligible heavy vehicle operators would pay no net fuel excise on road use for as long as the shield applied.

Hypothetical example: a motorist, a trucking firm and the budget

Hypothetical example: a motorist fills a 55-litre tank once a week. A cut of 27 cents a litre would reduce the tax in each fill by $14.85, close to the Coalition's "about $15 a tank" figure. Over a full three-month activation of 13 weeks, that comes to about $193. This assumes the whole cut is passed on at the pump, which is not guaranteed. Now take a small trucking business using 2,000 litres of diesel a month for eligible road use. If the road user charge fell from 32.4 cents to zero, its net fuel tax cost would fall by $648 a month, or $1,944 over three months, assuming the rest of the fuel tax credit rules apply as normal. For the budget, the Coalition estimates the shield would cost about $950 million for each month it is active. A three-month activation would therefore cost about $2.85 billion, and a six-month episode like 2022 about $5.7 billion, on the Coalition's own figures.

How the Coalition says it would pay for it

That claim faces a shrinking base. The Final Budget Outcome shows tobacco receipts fell from $7,767 million in 2024–25 to $3,930 million in 2025–26, roughly halving in a year. On a purely static basis, with no change in buying behaviour, an 80% cut applied to 2025–26 receipts would forgo about $3.1 billion a year. Supporters of the cut argue that cheaper legal cigarettes would draw buyers back from the illicit market, an effect a static calculation does not capture.