Australian households' fuel spend dropped 3.8% to AU$163.4 million in the week that started April 6, following a nearly 18% decline to AU$169.8 million in the week before, according to a Sunday report by Westpac.

This is the first two-week decline in fuel spending since the start of the conflict in the Middle East, Westpac said. Average fuel transaction values rose 2.9% week on week to AU$59.21 despite lower pump prices, suggesting that spending increasingly reflects essential fuel use rather than precautionary fill‑ups.

Fuel spend was up more than 16% on a year‑ago basis. Across a six‑week period, fuel spending was AU$236.7 million higher year on year. However, momentum is moderating as prices ease and households adjust, the report noted.

Discretionary spending was above last year's levels overall. However, the last week of March recorded the first year‑on‑year fall in discretionary spending, indicating that household are managing their budgets more tightly as essential costs normalize.

Fuel's share of wallet fell from multi‑year highs to 5.4% but remains above pre‑conflict norms, per the report.