Australia Petrol & Diesel — 2026 Two-Scenario Forecast

Reading the chart. The solid blue line is observed Australian retail petrol price for the five largest cities, from the pre-conflict baseline (week ending February 20) through today. The shape tells the story of the year so far: a sharp run-up from 177 to 263 cents per litre between Feb 28 (Hormuz closure) and end-March (compounded by the April 15 Geelong refinery fire mid-cycle), followed by a steady recovery on three structural factors — the federal government's 32 c/L excise cut effective April 1, easing international refined benchmarks, and demand response to the elevated April prices. The two dashed paths from today separate on a single calendar event: the statutory expiry of the excise cut on June 30. In Scenario 1 (green), the cut is extended; in Scenario 2 (red), it expires unrenewed and prices jump 32 cents per litre on July 1 by mechanical operation, regardless of what crude or refined benchmarks do.

Scenario 1Excise extended, Geelong restarts, retail continues to ease. Federal cabinet announces an extension of the 32 c/L excise reduction — most plausibly into Q3 or to year-end, on cost-of-living grounds. Viva Energy's Geelong refinery RCCU returns to service in June as announced (May 4 ASX disclosure), bringing the country's largest refinery back to over 90% capacity from its current 60% petrol / 80% diesel rate. International refined benchmarks moderate as US-Iran diplomacy advances on the timeline Trump indicated to ABC News ("reachable over the next week"). MSO petrol stocks — currently at the highest level since the regime began — provide additional buffer through any short-lived spikes. Retail petrol drifts in a 182–190 c/L band through H2 2026, ending December at approximately 182 c/L; diesel parallel at approximately 218 c/L. Three consecutive ACCC weekly prints have already pointed in this direction; the question is whether the policy decision on June 30 lets that trajectory continue, or breaks it.

Scenario 2Excise expires unrenewed, Hormuz extends, Geelong restart slips. The 32 c/L excise cut expires June 30 without extension — a mechanical 32 c/L jump in retail petrol and diesel on July 1, immediately reversing roughly half of the post-April recovery. Concurrently, Iran follows through on its June 1 threat to extend the closure to Bab el-Mandeb, removing the Red Sea workaround currently underwriting Asian refining throughput; Singapore and Korean cargoes to Australia tighten on the margin. The Geelong RCCU restart slips into August as repair complications surface (the alkylation unit damage from the April 15 fire was more extensive than the initial six-week estimate accounted for). MSO stocks draw down through Q3 toward the regulatory floor — still adequate but no longer at all-time highs. Retail petrol climbs through H2 2026, ending December at approximately 250 c/L (just below the end-March peak); diesel at approximately 285 c/L — close to its March peak and the prices that triggered the rapid emergency excise cut in the first place. The PM&C Fuel Supply Taskforce's public posture would likely shift from "buffer available" to active rationing-readiness messaging.

The excise cliffWhy June 30 is the single most consequential date in this forecast. The Australian fuel excise was halved from 41.2 to 20.6 cents per litre on April 1, 2026, with states and territories agreeing to forgo GST revenue on fuel — a combined consumer-facing reduction of 32 c/L. The measure is statutorily time-limited and expires June 30 unless explicitly extended by federal cabinet. The political calculus cuts both ways: an extension is fiscally expensive (estimated cost in the order of A$3-4 billion per quarter at current consumption volumes), but the political cost of allowing a mechanical 32 c/L jump in retail fuel prices on July 1 — visible at every petrol station in the country, the day after — is also material. As of June 3, the Treasurer has indicated the matter will be considered closer to expiry; the 2026-27 Federal Budget did not pre-announce an extension. The two scenarios on this page deliberately bracket the binary outcome rather than hedging into a middle path, because the decision itself is binary and the consequences are too. GEF will update this page each Thursday as the ACCC weekly print lands; the page will be revised materially as soon as the cabinet decision is announced.

Geelong & the MSOAustralia's import-dependence story, and the buffers that exist against it. Australia imports approximately 90% of its refined liquid fuels (petrol, diesel, jet) as a structural feature of its energy market — only Geelong (Viva Energy, Victoria) and Lytton (Ampol, Queensland) remain operating, and together they cover under 20% of national demand. Most refined product arrives from Singapore, South Korea and Japan, whose refineries are themselves significantly supplied by Middle Eastern crude — so the Strait of Hormuz reaches Australia by one-step indirection. Two buffers stand between Australian motorists and that exposure. First: the Geelong RCCU restart, expected in June per Viva Energy's May 4 ASX disclosure, takes the country's largest refinery from 60% petrol capacity back to over 90%. Second: the Minimum Stockholding Obligation, in force since 2022, requires industry to hold roughly 21 days of forward consumption cover above and beyond contracted sales. As of May 26, petrol stocks under the MSO are at the highest level since the regime began, and diesel stocks are close to highest — meaningful supply security, partly because industry maintained higher-than-required levels as a precaution, partly because elevated April prices destroyed some demand that has not yet fully returned. 3.3 billion litres of crude, diesel, jet and petrol are scheduled to arrive over the next four weeks. None of this prevents a price shock if the excise cliff materializes on July 1 — buffers protect against physical shortages, not against tax changes — but they do explain why the GEF Australia pin remains on watch rather than escalating to confirmed shortage.

MethodThis is a scenario forecast, not a prediction. The observed Feb-Jun line is built from ACCC Weekly Fuel Price Monitoring reports (three improving prints to date: May 8, May 15, May 22, May 29, covering data through May 27). The Jun-Dec branches are illustrative model paths, not guarantees; the real outcome will depend on the federal cabinet's June decision on the excise cut, the actual restart date and ramp-up rate of the Geelong RCCU, the pace of any US-Iran diplomatic settlement, whether Iran follows through on its Bab el-Mandeb extension threat, international refined-product benchmark movements through summer (which is winter in Australia), and weather-driven demand. The model is built around the May 29 ACCC reading and the May 4 Viva Energy guidance, and is refreshed each Thursday afternoon (Australia time) after the new ACCC print lands. Sources: ACCC Weekly Fuel Price Monitoring Reports (March 27 to May 29, 2026); PM&C Fuel Supply Taskforce public-information page; Viva Energy May 4 ASX disclosure on Geelong RCCU restart; Australian Taxation Office April 2026 excise duty rates; DCCEEW MSO weekly reporting; Australian Institute of Petroleum public statements; IEA Oil Market Report May 2026. Per-disruption detail and the live AU shortage map at global-energy-flow.com/shortages/australia/.