Demand for fuel is expected to eventually slump with the rise of EVs on our roads, but the NRMA says it’s hard to say when. Photo: James Coleman.
Petrol sales in Australia are on the decline, partly due to the rising number of battery, hybrid and plug-in vehicles on the road, a new report shows.
But how much longer until lower demand translates into cheaper petrol? The National Roads and Motorists Association (NRMA) says the day is coming, but it’s hard to say exactly when.
The latest quarterly petrol monitoring report from the Australian Competition and Consumer Commission (ACCC) found sales of regular unleaded petrol have been declining over time.
The ACCC credits more fuel-efficient vehicles and changing travel patterns, due to more working-from-home arrangements, for most of the decline, but adds EVs and other hybrid vehicles are also partly responsible.
2025 has been the cheapest year for petrol since COVID. Photo: James Coleman.
“The number of registered battery electric vehicles has increased significantly over the past few years, although in early 2025 they still made up only around 1.2 per cent of total registered vehicles,” the ACCC said.
Diesel sales, meanwhile, have grown, with more than a million more registered diesel vehicles on Australian roads between 2021 and 2025.
Between January and October, battery electric vehicles made up eight per cent of all new vehicle sales in Australia, at 83,805 sales, trailed by plug-in hybrids at four per cent, or 42,797 sales.
Petrol still leads at 39 per cent market share, followed by diesel at 33 per cent and hybrid at 16 per cent. In the ACT, EVs accounted for more than 30 per cent of new sales.
NRMA spokesperson Peter Khoury said petrol sales were most likely down across the country for economic reasons rather than EV uptake – at least for now.
“We know the cost of living is biting and what do people do? They don’t go away for weekends, they don’t go on holidays, they don’t go out as much as they normally would, all of which means they’re not driving,” Mr Khoury told Region.
“Yes, EV sales are increasing, which means more people are buying electricity than fuel and hybrid sales are also increasing at a much faster rate and they’re much more fuel efficient.
“But how much is that going to have an impact on fuel prices? It’s more economic than anything else.”
NRMA’s Dan Maranhao unveiling a new EV charger in Yass with Yass Valley mayor Rowena Abbey and member for Goulburn Wendy Tuckerman. Photo: NRMA.
Mr Khoury said Australia was also more likely to see a flow-on effect from overseas markets, where EVs were more prevalent.
“As the EV market grows and petrol and diesel vehicles become secondary, then, it’s absolutely going to have an effect. But the reality is, it’s probably going to happen overseas first, because we’re just not buying EVs as quickly as a lot of other countries.
“Decreasing demand does put downward pressure on global oil prices and then people in Australia who are still driving petrol and diesel cars will be the beneficiaries of that. But we would not even try to guess when that might happen.”
While sales were down, the ACCC report also found petrol prices were higher across most Australian capitals compared to previous quarters.
“Average petrol prices were higher in Canberra, Hobart, and Darwin and on average across over 190 regional locations that the ACCC monitors.”
Prices across the five largest cities – Sydney, Melbourne, Brisbane, Adelaide, and Perth – averaged 178.8 cents per litre, up 3.1 cents from the previous quarter. Petrol Mate lists the current national average at $1.83 per litre, with the ACT at $1.87.
But Mr Khoury said Australians have enjoyed the “cheapest year pretty much since COVID” and recent increases were likely due to competition cycles between fuel stations.
“I suspect what happened in that quarter is that you had a series of price cycles in the capital cities that peaked during that period … but there was certainly nothing in that quarter to imply prices were much higher.
“The wholesale price this year has been between $1.60 and $1.70 for the whole year. It’s quite uncommon to have that sort of stability, particularly when you think about the things that have happened in the last few years.”
NRMA expects fuel prices may drop slightly in 2026. Photo: Michelle Kroll.
In Canberra, the average price for fuel has been about nine cents per litre cheaper in 2025 compared to 2024.
Looking ahead to the holiday season, Mr Khoury said he was hopeful.
“We do not expect prices to go up – they certainly shouldn’t. If anything, they may even come back a little bit,” he said.
“Demand has fallen off a bit globally. You look at China, which is the world’s biggest importer of oil and it’s continued to stutter along with its GDP growth and economic outlook. Then there’s concern about the US economy, particularly with the introduction of the tariffs. So demand globally has been suppressed, but supply has been consistent.”
ACT and NSW motorists can check for the cheapest fuel in their area through the FuelCheck website and app.
