Fuel costs mounting pressure on transport affordability across Australia

Tram in Melbourne CBD

Tom Hounslow

Posted August 15, 2022

The latest edition of the Transport Affordability Index has shown that despite best efforts to ease cost of living pressures, transport costs remain stubbornly high.

Transport costs across the country have risen by $11.70 per week in the past three months, with Australian households now spending an average $379.90 per week on transport, new figures show.

The latest Transport Affordability Index shows nationally, transport costs now represent an average of 15.2 per cent of household income.

While an extra $11.70 in three months may not seem like a major increase, these gradual increases have added $74.34 to transport costs every week, or $3,865.68 per year since the second quarter of 2020.

Compiled by the Australian Automobile Association (AAA) – Australia’s peak motoring body – the survey factors in all forms of transport, mobility, and associated costs to determine the financial pressures of transportation costs for the public each annual quarter.

Fuel prices continue to be a major burden for Australians, now accounting for 26.4 per cent of transport costs, despite the Federal Government’s six-month fuel excise cut.

“Fuel prices are rising and continue to be a significant contributor to cost of living pressures across both regional and metropolitan Australia,” said AAA Managing Director Michael Bradley.

“This is the first time the national weekly average spent on fuel has passed $100 since the index’s inception in 2016.”

RACV General Manager Mobility, Elizabeth Kim, echoed the AAA’s concerns for fuel prices. “For some people, these increases will have prompted them to reconsider their choices when it comes to transport.”

“RACV is committed to providing Victorians with a choice with how they get around – whether that is by car, on a bike, walking, public transport or on an e-scooter.”

With the rising cost of fuel, more people are using the Fuel Tracker feature on RACV’s arevo journey planner app, which offers real-time petrol prices and trends to help you can find the cheapest time and place to buy petrol.

“It is not uncommon for retailers close by to be selling fuel at different rates, so it's important to keep an eye on the Fuel Tracker and include independent retailers in your searches, who can often have some price flexibility.”

A full breakdown of the costs and comparison tables are available on the AAA website.


People boarding a tram

Melburnians now spend 16.4 per cent of their income on transport. Image: Getty.

Transport costs breakdown

The AAA’s Transport Affordability Index considers eight key areas of transportation costs. Here is how they have changed for Australians, per week, since the previous report:

  • Fuel: +$5.22
  • Car loan payments: +$3.83
  • Insurance: +$2.09
  • Servicing and tyres: +$0.45
  • Tolls: +$0.11
  • Registration, CTP and licensing: +$0.03
  • Roadside assistance: +$0.03
  • Public transport: $0.00

While metropolitan and regional households have both faced increased costs, metro households now spend an annual average of $21,435 in transport costs per year; $3,600 more than the $17,835 regional households spend.

With car loan payments averaging $153.30 per week, per household across Australia, this category is by far the largest transport cost, representing 40.4 per cent of total costs.

Fuel, averaging $100.39 per week for Australians, is the second-highest cost, representing 26.4 per cent.

As public transport is primarily an issue for residents of metropolitan cities, there are no comparative figures for regional residents. Despite this, $20.92 is the average cost of public transport across Australia, or 5.5 per cent of transport costs for households. 


Petrol bowser

Geelong residents spend an average of $118.31 on fuel. Image: Getty.

City living becoming more expensive

During the second quarter of 2022, the typical Australian metro household’s average cost of transport increased by $581 per year – but that’s only the average. Darwin residents are facing the greatest climb in transportation costs over the past three months, with an increase of $890. Melbourne claimed the unwanted title as home to the second-largest increase of $685.

Sydney continues to be Australia’s most expensive city to live in for transportation costs, averaging $486.18 per week, followed by Melbourne ($461.01) and Brisbane ($454.52).

While the increased costs have added to growing cost of living pressures, the Federal Government’s temporary fuel excise cut saw a $581 decrease in the annual fuel excise costs across the country.

Much like most things in life, costs are relative, and while an increase of $13.18 for transport costs for Melbournians may not seem like a lot for some, for others, it could tip the scales. This is why the cost of transport as a percentage of income could be the most important figure.

While Sydney residents may pay the most for transport, the city only ranks fifth as a percentage of their income, costing 15.5 per cent of their annual income. Melbourne ranks third with 16.4 per cent of income spent on transport.

Canberra residents are feeling the pinch the least, spending only 13.3 per cent of their income, while Hobart residents are hardest hit, spending 18.2 per cent.

Good news, bad news for Geelong

Melburnians feeling the hip-pocket-pinch might want to consider packing their bags and moving west to Geelong.

While Geelong is the third-most-expensive regional city in Australia to live in for transport, with households now paying an average of $719 more per annum for transport costs ($34 more than Melburnians), Geelong residents only spend a 13.4 per cent of their income on transport costs.

Fuel prices are where Geelong residents are getting hit the hardest compared to metro Melbourne. Where Melburnians spend an average of $97.29 per week on fuel, Geelong residents spend an average of $118.31 on fuel. This makes Geelong the second-most expensive regional town in Australia for petrol (behind Bunbury in Western Australia).

Alice Springs is the most expensive regional city for transport costs ($370.59 per week), while the Western Australian town of Bunbury taking in the second position ($362.85 per week.