Australian Prime Minister Julia Gillard has announced concessions for motorists and self-funded retirees in a bid to ease concerns about the introduction of a carbon tax.
Petrol could rise by A6c a litre if carbon is priced at $A25 ($32.50) a tonne.
But Ms Gillard says the Government has decided the carbon tax will not apply to petrol for individual drivers.
"I believe it will stack up to the test of doing the right thing by our environment ... doing the right thing by Australian families," she said in an ABC television interview.
"I do believe it's good news for Australian families, small businesses, tradies, people in regional areas, that petrol is not going to be included in this scheme."
The move aims to alleviate concerns about the cost of living under a carbon tax, the ABC reports.
Still exempt under ETS
Ms Gillard says it should put an end to Opposition Leader Tony Abbott's statements that the carbon tax will be a big hit on petrol bills.
She says petrol will remain exempt when the carbon tax moves to an emissions trading scheme (ETS), because the Government does not believe individual drivers should pay more for fuel.
"Petrol will be out now and out for the future," she said. "I represent an outer urban electorate - I know what it's like for people to have no choice but to jump in their car to get places."
Larger businesses could still face higher petrol prices under the scheme, but the Government has not yet explained how they will be charged.
Compensation for some retirees
Self-funded retirees will also be compensated under a plan to provide quarterly cash payments.
About 300,000 self-funded retirees will receive household assistance, with about 100,000 of those also receiving tax cuts.
The assistance will begin on the same date the carbon tax deal is signed off on, but Ms Gillard would not reveal how soon that will happen.
The ABC understands the Government's multi-party climate change committee has made significant progress towards a deal and an agreement is expected in the next week and a half.
Ms Gillard has said she is determined to switch from a carbon tax to an ETS as soon as possible. The tax is expected to come into effect next year and an ETS possibly in 2015.