It Takes More Than Expensive Petrol to Change How Australians Travel
NIEIR (National Institute of Economic and Industry Research)
- Despite a 20.9% increase in petrol prices in 2026, consumption is expected to only decrease by 2.4%, indicating price alone won't reduce transport emissions
- Urban residents are four times more likely to own electric vehicles than rural Australians, highlighting an infrastructure gap between cities and regional areas
- With the average vehicle being 10 years old and 98% of vehicles still using combustion engines, fleet turnover is too slow to meet 2035 emissions targets
- Government action is needed in three key areas: EV charging infrastructure, freight optimisation, and transit-first planning
- A window now exists to ramp up necessary infrastructure changes while fuel prices and supply concerns remain prominent
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Following a 20.9% jump in early 2026, petrol consumption is expected to see a minimal drop of only 2.4% This exposes a hard truth: Australia's transport emissions won't fall without policy, infrastructure and long-term planning— not price alone. NIEIR's new analysis of petrol consumption and vehicle sales data explains why. |
The 2026 oil price shock showed that even when petrol gets much more expensive, people still drive nearly as much. Transport emissions are likely to keep growing unless governments build alternatives to driving.
NIEIR's analysis of petrol consumption and vehicle sales data shows price alone won't solve the problem.
"Higher fuel prices make driving expensive, not optional," said Brad Vakulcyzk from NIEIR. "Without real alternatives—charging networks, transit, cycling infrastructure—people just pay more to pollute. Policy settings will determine whether emissions actually fall."
The numbers tell the story
City dwellers are four times more likely to own an EV than rural Australians. This matters because it means Australia is building EV infrastructure in wealthy cities whilst leaving regional and lower-income communities behind. New residents in car-dependent areas have limited charging access and no viable transit alternatives. Without charging in apartments and regional areas, that gap will widen, not close.
Fleet turnover is the real bottleneck
The average vehicle is 10 years old. Cars purchased today will still be on roads in 2035. Even with rapid EV uptake, 85.4% of new cars remain petrol or diesel. Internal combustion engines still make up 98% of vehicles on the road.
This is the critical constraint: Australia can't electrify fast enough to meet 2035 targets without policy action on alternatives. Fleet turnover alone won't get us there.
Three things need to happen now
Transport emissions won't fall from market forces alone. Governments must act simultaneously on:
- EV charging infrastructure — especially in apartments and regional areas (not just wealthy suburbs)
- Freight optimisation — consolidation hubs, micro-mobility, delivery planning (because diesel won't disappear by accident)
- Transit-first planning — public transport, cycling, walkability (because not everyone can afford an EV, and car-dependent new suburbs have no alternatives)
Current concern around fuel prices and supply attracts increased support for action. Those acting now will have systems in place before 2035 targets tighten. Those that delay will face higher costs and unmet targets.
To read more in-depth analysis on this topic Click HERE to read Brad Vakulcyzk's BLOG
About the Data
NIEIR's Local Energy and Emissions Monitor (LEEM) tracks energy transition, emissions and transport trends across Australia's Local Government Areas over the last 20 years. Click HERE to request access to the data
For more information: [email protected] or nieir.com.au
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Ryan James
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