The end of fuel excise cuts and what this means for fuel tax credits

On 7:30 pm (AEDT) on 29 March 2022, the then Treasurer, Josh Frydenberg, handed down the 2022‒23 Federal Budget. One of the main items in this budget was a temporary cut to fuel excise by 50% for 6 months. This fuel excise cut ended on 28 September 2022.

Interaction between excise tax and fuel tax credits

At the time of the March 2022 Federal Budget, the road user charge was sitting at 26.4 cents per litre. This meant that if you were claiming fuel tax credits for vehicles operating on public roads, the reduction in fuel excise to 22.1 cents per litre reduced the claim to zero.

This is because the fuel tax credit is intended to be a refund of the fuel excise paid by businesses when acquiring fuel.

Recent changes to fuel tax credits and the road user charge

During this 6-month period between March and September, there have been a couple of changes to the calculation of fuel tax credits that you need to be aware of.

  1. The full fuel tax credit itself was increased on 1 August 2022 in line with the consumer price index (CPI) to 46.0 cents per litre.
  2. The road user charge has also changed, moving up to 27.2 cents per litre.

This change took placeon 13 September 2022 and was done by legislative instrument. The determination of the new road user charge did not take effect until 29 September 2022, when the reduction in fuel excise was removed.

Completing your September 2022 Business Activity Statement

If you are claiming fuel tax credits for fuel used by heavy vehicles to operate on public roads, you can make a claim in your September 2022 Business Activity Statement (BAS) for the fuel you purchased on 29 and 30 September.

The new rate for fuel tax credits is 18.8 cents per litre.

Going forward, this rate will continue until the next CPI increase, which is due in February 2023. Please ensure that you provide us with any fuel purchases for these dates for this quarter’s BAS.

If you have any questions relating to fuel tax credits, do not hesitate to contact our office. We would be pleased to assist you further on this.


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