Diesel costs 45c a litre more than petrol. Does it still pay?

Diesel is no longer automatically cheaper to run. Across Australia’s five largest cities on 26 August 2026, the ACCC recorded average retail petrol at 205.5 cents a litre and diesel at 250.2 — a 44.7 cent gap. At those prices a diesel work vehicle has to burn about 18% fewer litres than the petrol equivalent just to break even.

What actually changed on 3 August?

The temporary fuel excise cut ended. Excise on petrol and diesel went back to the full rate, and that rate had also been indexed upward by 2% in the meantime. The ATO’s schedule shows the three steps the last six months put your fuel card through.

The ACCC put the full tax impact at up to 18.8 cents a litre once the GST charged on top of the higher excise is counted.

Two things are worth noting before you blame the excise for everything. First, the rate is identical for petrol and diesel — the ATO lists both at $0.537 a litre, and it always has. Second, excise is only one component of the pump price, and not the biggest one.

Why has diesel risen so much further than petrol?

Because petrol and diesel are different products sold into different markets. The ACCC benchmarks Australian retail petrol against Singapore Mogas 95, and diesel against Singapore Gasoil with 10 parts per million sulphur content. Those two benchmarks tend to track each other over the long run, but diesel also carries remote power generation and industrial demand, and this year it copped supply shocks petrol did not — including Russia banning diesel exports after Ukrainian drone attacks on its refineries.

That has opened a gap a small fleet can feel. These are the ACCC’s daily average retail prices on 26 August 2026.

Here is the part that matters. On 20 February 2026 — about a week before the conflict between the United States, Israel and Iran escalated — the five-city averages were 170.9c for petrol and 176.6c for diesel. The gap was 5.7 cents a litre. Six months later it is 44.7 cents.

For most of the last decade, “diesel costs a few cents more but goes a lot further” was a safe rule of thumb. At a 44.7 cent premium it stops being a rule of thumb and becomes a sum you have to actually do.

How much thriftier does a diesel have to be to break even?

The maths is simple enough to do on the back of a docket. Divide the petrol price by the diesel price: 205.5 ÷ 250.2 = 0.821. That means a diesel has to burn no more than 82.1% of the litres the petrol version burns just to cost the same to run.

At 205.5c petrol and 250.2c diesel, a diesel must use about 18% fewer litres per 100km than the petrol equivalent simply to draw level.

Turn that around and it gets uncomfortable. If the diesel version of your vehicle is only 12% thriftier than the petrol version, it now costs about 7% more per kilometre to fuel — before you touch the higher purchase price, the dearer servicing or the DPF.

What does that look like on an actual work vehicle?

Take a van that Australian government testing covers in both fuels. The Green Vehicle Guide lists the 2019–2024 Toyota HiAce LWB auto at 8.2L/100km as a 2.8L turbo diesel and 12.0L/100km as a 3.5L V6 petrol — a diesel that uses 31.7% fewer litres, comfortably past the break-even line.

The diesel still wins. But its advantage has shrunk by about 31%, and on a van doing 30,000km a year that is roughly $570 less saving than the same comparison delivered in February.

The lesson is not “buy petrol”. It is that the size of the diesel gap now depends entirely on how big the consumption difference is on the specific vehicles you are choosing between. A 30% gap survives this. A 12% gap does not. Laboratory figures are for comparing vehicles, not predicting your own consumption — your loads, your traffic and your driving will move the real number.

Does the tax side tip the answer either way?

Not for a ute or a van, no. Fuel tax credits are the one lever people expect to favour diesel, and they do not — the ATO applies the same rate to both liquid fuels.

That last row is the one that catches small fleets out. The ATO is explicit that fuel used in light vehicles of 4.5 tonnes GVM or less travelling on public roads is not eligible, whichever fuel it burns. If everything you run is a ute or a van on sealed public roads, fuel tax credits are not part of your comparison at all. Our guide on whether your fleet qualifies for fuel tax credits walks through where the line actually falls, and your accountant can confirm your own position.

What can you actually control?

Not the 44.7 cent gap — that is set in Singapore, not at your local servo. What you can control is which servo, and the spread there is not small.

On 26 August the ACCC recorded diesel in Melbourne between 234.9c and 329.9c on the same day. Sydney petrol ran from 188.7c to 219.7c. On a 70-litre fill, the Melbourne diesel spread is more than $60 between the cheapest and dearest site in town.

• Petrol buyers have a timing lever. Retail petrol prices in the five largest cities move in regular cycles, so which day you fill matters.
• Diesel buyers do not. The ACCC is blunt that retail diesel prices do not move in cycles. For diesel, site choice is the only lever.
• Either way you need the price before you pull in, not the receipt afterwards.

That is the plainest reason to have the pump price in the cab. Axlerun’s fuel and EV locator reads the live government price feeds in NSW, Victoria, Queensland, South Australia and Western Australia, and it sits on the free Drive plan along with fuel entries against each vehicle — first three vehicles free forever, no hardware. It will not close a 44.7 cent structural gap. It will stop you paying 329.9c when 234.9c was four streets away.

What to check before you order the next one

• Compare the combined-cycle figures for the exact variants you are choosing between, not the fuel types in general.
• Work out the litre difference as a percentage. Under about 18% and the petrol is currently cheaper to fuel.
• Add servicing, AdBlue if it applies, and the purchase premium before you decide — fuel is one line, not the whole cost.
• Track what your existing vehicles actually consume. A cost per kilometre built from your own fuel entries beats any brochure, and it is the same discipline behind claiming on cents per kilometre or a logbook.

Rates and prices move. The excise is indexed again in February, and diesel’s premium will narrow when the refining picture settles. Re-run the sum then, on your own numbers.