Fuel companies will soon face bigger fines for ripping off motorists, but whether the government's latest crackdown will actually stop rapid price spikes remains hotly contested.
Treasurer Jim Chalmers introduced a bill aimed at tackling "price gouging at the source" by enabling the Australian Competition and Consumer Commission (ACCC) to impose higher penalties, with maximum fines increasing from $50 million to $100 million per offence. The crackdown targets "lying about the reason for price increases, price fixing, colluding on prices and other cartel behaviour".
The timing is pointed. Within days of the start of US-Israeli military action against Iran in late February, some petrol stations in Australia had already hiked their prices significantly, leading to allegations of price gouging and petrol profiteering. The ACCC launched a probe into petrol and diesel prices after rises that outstripped international increases and more than 500 reports of potential price gouging.
Yet the policy comes with a significant caveat. Consumer advocates expressed concern that there still isn't a ban on price gouging, questioning whether the absence of such a ban was fair and reasonable. Last year, Labor passed a price gouging ban on supermarkets, which will come into effect on 1 July. Under the law, large retailers found to have charged prices that are excessive when compared to the cost of the supply, plus a reasonable margin, will face fines up to $10 million.
Morgan Campbell, head of policy at consumer group CHOICE, acknowledged the deterrent value of larger penalties. "If there's a company out there which is colluding with another company to keep prices high, there were going to be bigger penalties for that. So there's a deterrent effect in all of that," he told the media. But he raised a fundamental tension: "The government's law doesn't make price gouging illegal, it just punishes companies that lie about doing it." Campbell noted that Australia has "a law that says it's illegal to use your market power to keep prices artificially low, but we have no law that says it's illegal to use your market power to keep prices artificially high."
The enforcement timeline also matters. The new penalties won't kick in any meaningful way for several years, as ACCC investigations can take years and contested court trials could take 18 months from commencement until hearing before a judgment is handed down. However, the government is hoping the increased penalties will be a strong deterrent to businesses now from engaging in conduct that breaches the Australian consumer law.
There's also the structural question of Australia's fuel market. Australia imported 84 per cent of its petroleum product demand last year, leaving it exposed to global shocks. Petrol and diesel price rises between 20 February and 11 March varied widely between Australian capital cities and in many cases increased as fast as wholesale prices and in some cases by a greater extent. The ACCC's new weekly fuel price monitoring update also showed Australian refined international petrol and diesel benchmark prices increased more than international oil prices during the initial period of the conflict.
Experts note that some countries have taken more direct routes. Other countries assess price shifts during supply disruptions, with some having things in place specifically to address market disruptions and supply shortages that say it's illegal to charge unreasonable prices when there's a disruption or shortage. Australia's deregulated market framework, where prices are determined by market forces rather than government control, means such direct intervention remains off the table.
The ACCC itself is ramping up scrutiny regardless. The ACCC will ramp up fuel price monitoring, reporting weekly with a focus on unusual price spikes, supplementing its existing petrol price monitoring powers and recently acquired ability to issue on-the-spot fines. In February 2026, the Federal Court ordered Mobil Oil Australia to pay $16 million in penalties for making false or misleading representations about the fuel sold at nine petrol stations in north and central Queensland.
The genuine tension here reflects competing policy values. Stiffer penalties for deceptive conduct and collusion align with protecting consumers and ensuring markets operate fairly. Yet without a direct ban on price gouging itself, the law becomes reactive: it punishes the lies companies tell about price increases rather than preventing the increases outright. For motorists already doing it tough during global volatility, that distinction is more than academic.