Australian petrol demand falls 11.6% in two years

Why has Australian petrol demand fallen 11.6% in just two years?

Australia’s automotive market has undergone a significant transformation over the past several years. Hybrid and electric vehicle sales have grown rapidly, manufacturers have expanded their electrified line ups, and consumers have increasingly embraced new technologies.

The latest Australian Petroleum Statistics show these changes are beginning to reshape Australia’s fuel market.

Between May 2024 and May 2026, automotive petrol volumes supplied to the domestic market declined from 1,398.9 million litres to 1,236.1 million litres, a reduction of 162.8 million litres, or 11.6%, over just two years.

Importantly, these figures relate only to automotive petrol. They exclude diesel, aviation fuels and other petroleum products, making them one of the clearest indicators of changing demand from Australia’s petrol powered passenger vehicle fleet.

More than one factor is driving the decline

The rapid growth of hybrid and electric vehicles is undoubtedly contributing to lower petrol demand, but the latest data suggest several structural forces are working together.

Australia’s vehicle fleet is becoming increasingly fuel efficient, with even conventional petrol vehicles consuming less fuel than previous generations.

At the same time, consumer behaviour is evolving.

As highlighted in Fifth Quadrant’s recent analysis of how cost of living pressures are changing the way Australians drive, many Australians report combining trips, reducing discretionary travel and looking for practical ways to minimise fuel costs. These behavioural changes are also likely reinforcing the decline in petrol demand.

A structural shift is underway

Monthly petrol volumes naturally fluctuate due to seasonal travel patterns, holidays and economic conditions. However, the sustained decline over the past two years points to a broader structural shift rather than short term volatility.

For fuel retailers, convenience operators, vehicle manufacturers, fleet operators and energy providers, this represents an important market signal. Declining petrol demand is no longer simply a future expectation. It is becoming measurable in the market today.

The bottom line

Vehicle sales tell us what Australians are buying. Petroleum statistics tell us how Australians are travelling. Increasingly, both are pointing in the same direction.

An 11.6% decline in automotive petrol volumes supplied to the domestic market over the past two years is one of the clearest indicators yet that Australia’s reliance on petrol is beginning to decline. While electrification is a key driver, improvements in vehicle efficiency and changing driving behaviour are also contributing to the shift.

The pace of change will continue to depend on vehicle replacement, fuel efficiency improvements and consumer behaviour. However, the latest petroleum statistics provide clear evidence that Australia’s demand for automotive petrol is already trending lower.

Need deeper insight into Australia’s automotive market? Contact us to discuss how our automotive market research can help you understand changing consumer behaviour, vehicle trends, fuel demand and emerging opportunities across the sector.

Research sources: Australian Government, Australian Petroleum Statistics, May 2026 data extract; Australian Government, Australian Petroleum Statistics, May 2024 data extract; Fifth Quadrant, Australian Fuel Prices Are Changing Driving Habits.