Fuel Costs Drive Inflation as Analysis Shows Huge EV Running Savings

Spiking fuel prices are putting pressure on Australian household budgets, but fresh economic modelling shows electric motoring offers a powerful shield against cost-of-living increases.

Research prepared by Endgame Analytics for the Electric Vehicle Council shows petrol and diesel price surges accounted for nearly a fifth of Australia's recent 4.3 per cent annual inflation rate. Over the twelve months to September, automotive fuel costs jumped by 23.6 per cent, adding 0.77 percentage points directly to the national inflation measure.

The study highlights how heavily Australian families feel global oil shocks at the bowser compared with drivers using electricity. For an average motorist travelling 15,000 kilometres a year in a small SUV, higher petrol and diesel prices added approximately $442 to annual running expenses. By comparison, electricity price movements added only $48 to the yearly cost of running an equivalent electric car—around one-tenth of the burden faced by combustion drivers.

At the same time, sticker prices for cleaner cars continue to moderate. Base pricing across Australia's ten most popular electric cars fell by an average of 3.1 per cent over the same period, contrasting sharply with rising costs across broader household goods.

What this means for your novated lease

If you are reviewing your household budget or planning your next vehicle, these figures underline why novated leasing an electric vehicle remains one of the sharpest financial moves available to Australian employees.

• Shield against volatile bowser costs: While traditional drivers absorb unpredictable price jumps each week, an EV lease allows you to bundle home or public charging directly into your regular pre-tax salary deductions. Electricity running expenses are not only lower overall, but their price trajectory is substantially steadier than refined petroleum.
• Stack fuel savings on top of tax perks: Under current federal policy, eligible battery electric cars valued under the luxury car tax threshold ($91,661 for 2026–27) remain fully exempt from fringe benefits tax. Financing the car and all its running expenses with pre-tax income magnifies the day-to-day fuel savings shown in the analysis.
• Act before rules tighten: Proposed legislative changes will phase down the full exemption from 1 April 2027, introducing tighter vehicle price caps for the 100 per cent discount. Securing an EV novated lease ahead of that cutoff allows you to lock in today's rules for the entire lease agreement, buffering you against both tax changes and volatile fuel prices.