Following National Cabinet discussions, the Australian Government has announced a temporary fuel excise reduction to ease cost-of-living pressures linked to global conflict.

From 1 April 2026, the tax on petrol and diesel will be halved for three months, with service station prices expected to drop over the coming days or weeks depending on current stock.

The measure sits within a nationally coordinated fuel supply plan now formally in place, with governments confirming there will be no fuel rationing at this stage, though contingency planning has been agreed should conditions worsen.

This comes as ongoing conflict in the Middle East continues to create ripple effects beyond the region, contributing to global uncertainty and rising costs. Monitoring will continue, with governments indicating further measures may be considered if global pressures intensify.

For community-managed mental health services, fuel access is closely tied to service delivery. Many organisations rely on travel to provide outreach, home visiting and community-based care, particularly in regional and rural areas.

Mental Health Coordinating Council (MHCC) has been in contact with the Minister’s office to ensure these impacts on community-managed mental health services are clearly understood. We have highlighted the sector’s reliance on travel to deliver care, and the risks that rising fuel costs or supply constraints could pose to both service delivery and access for the people our members support.

The following outlines the key decisions agreed through National Cabinet.

Key National Cabinet decisions

1. Fuel excise cut to lower prices immediately

• National Cabinet agreed to halve the federal fuel excise on petrol and diesel for three months.
• This will reduce pump prices by 26.3 cents per litre, starting 1 April 2026.
• The heavy vehicle road user charge has also been reduced to zero for the same period to ease freight and supply chain costs.
• The total budget cost of this package is estimated at $2.55 billion.

2. National Fuel Security Plan formally activated

• Leaders agreed to a national four-stage fuel security plan to guide a coordinated response between the Commonwealth, states and territories.
• Australia has officially moved to Level 2 – “Keeping Australia moving”, reflecting emerging pressure but no immediate nationwide shortages.
• Higher stages (if conditions worsen) could include targeted demand reduction or prioritisation of fuel for critical services such as emergency services and utilities.

2. No fuel rationing at this stage

• National Cabinet explicitly ruled out fuel rationing for now, saying supply is tight but still functioning.
• Rationing would only be considered under worst-case scenarios if global supply disruptions become prolonged and severe.
• Leaders emphasised voluntary fuel conservation rather than mandates.

2. Strengthened national coordination on supply

• The Fuel Supply Taskforce, led by Anthea Harris, will continue meeting twice weekly with state and territory officials.
• The taskforce is responsible for:
  o Monitoring fuel arrivals and domestic distribution
  o Managing cross-border issues
  o Identifying regional shortages early
• Leaders stressed that national coordination is essential to ensure fuel reaches areas of highest need.

2. Clear link to Middle East conflict

• National Cabinet acknowledged that the war involving Iran and disruptions in the Strait of Hormuz are driving global oil price volatility.
• While Australia currently has sufficient fuel shipments arriving, leaders warned impacts will intensify if the conflict drags on.

MHCC recognises that the impacts on the community are broad. Economic instability and cost-of-living pressures can affect people’s mental health and wellbeing, particularly for those already experiencing disadvantage or relying on consistent support.

We will continue to monitor developments and engage with government to ensure these impacts are reflected in ongoing responses.