Victoria’s peak motor industry body is advocating for a fairer road user charge as the government again hikes the fuel excise.
The Federal Government is raising fuel excise in line with CPI on Monday 4 August 2025 from 50.8 cents per litre to 51.6 cents per litre.
While the overall tax take from excise is expected to increase from $17.2 billion in this financial year to $17.7 billion in 2026- 2027, there is a growing gap in it as a revenue source as the number of zero and low emissions vehicles rise and pay for less fuel.
The fuel excise funding is used in part to improve and repair roads all which all vehicles drive.
Victoria attempted to implement a road user tax but it was stuck off by the High Court in 2023 as a tax states could not legally collect .
According to the AAA, the 2023-24 fuel excise bill For a typical household, was about $1,283.
Victoria’s peak motor industry body, the VACC was scathing as what it sees as a tax grab by increasing the excise twice a year and it was retailers who bore the brunt of motorists’ anger.
It wants more transparency in how the tax is collected and spent.
“Motorists deserve transparency about how their fuel is priced. They need to understand that fuel excise isn’t a static tax – the government increases it every six months, and it’s a significant component of what they pay at the pump.”
“This is an indiscriminate tax that disproportionately affects low-income earners and families who rely on their vehicles for work and essential travel,” VACC CEO Peter Jones says.
“Motorists are being slugged with excise, then charged GST on that excise. It’s no wonder Australia continues to have some of the highest fuel costs in the developed world,” Jones added.
The Federal Government’s New Vehicle Efficiency Standard (NVES), which became mandatory in July 2025, is designed to accelerate electric vehicle uptake but no comprehensive plan has yet been developed for the revenue gap it will leave
“The VACC advocates for a nationally consistent road user charging system to ensure fair contributions from all road users whilst avoiding a patchwork of state-based policies.”