Retail diesel prices in Australia - Data and Analysis (2007-2033)

IBISWorld forecasts average retail diesel prices to surge 18.6% in 2025-26, to 219.5 cents per litre. Retail prices remained largely flat over the eight months through February 2026 as global economic growth remained weak, limiting demand at the same time as global supply conditions improving in recent years following several decisions from OPEC to raise production levels, driving down prices. However, flowing the start of the US-Israel conflict with Iran and the subsequent closure of the Strait of Hormuz global crude oil exports have encountered significant disruptions, severely tightening supplies of refined petroleum products like diesel around the world, causing prices to skyrocket. There is currently only around a one-month supply of diesel in the country and the Federal Government has announced it will release an extra five days of supply from the emergency stockpile.Domestic diesel prices are driven mainly by fluctuations in global prices, particularly movements in the Singapore benchmark price. According to the ACCC, price changes in the Singapore benchmark take approximately two weeks to work their way through the Australian supply chain. Diesel prices are also influenced by fluctuations in the world price of crude oil, refining costs and taxes. According to the AIP, approximately 70% of diesel sold in Australia is imported from overseas, primarily from Japan, South Korea and Singapore. As crude oil is generally priced in US dollars, the value of the Australian dollar relative to the US dollar can also affect retail diesel prices. Likewise, diesel prices are influenced by supply and demand conditions and excise levels in the domestic market. The excise on fuel is indexed twice annually in February and August, in line with the consumer price index. The excise tax currently stands at 51.6 cents per litre. According to the AIP, around 25% of diesel is sold to retail customers, with the remainder primarily sold in bulk to commercial customers. Key users of diesel include road freight operators, agricultural producers and operators in the mining sector.The world price of crude oil is highly correlated with fuel prices in international markets and has displayed volatility in recent years. Global oil prices soared in 2021-22 due to the start of the Russia-Ukraine conflict and a recovery from weaker prices at the height of the pandemic. Prices started to ease in 2023-24 as supply conditions improved, leading to retail diesel prices declining over much of the three years through 2025-26. Declining crude oil exports following the closure of the Strait of Hormuz in early 2026 has again driven prices higher. Overall, IBISWorld anticipates average retail diesel prices to rise at a compound annual rate of 11.8% over the five years through 2025-26, off a low base year in 2020-21.