Yesterday was national cabinet day. Unlike the COVID response, it appears thus far that we have all states working in unison on the fuel crisis and developing a national response. Let’s hope that continues to be the case.
Fuel excise (tax)
The Federal Government has announced a temporary 50% cut to fuel excise on petrol and diesel, running from 1 April 2026 to 30 June 2026. This fuel excise is part of the price you pay at the bowser and runs at 52.6 cents per litre. So, a 50% cut should in theory work to lower fuel prices by 26.3 cents per litre. Arguably minor assistance when the price exceeds $3!
However, many businesses such as farmers and heavy industry (trucking, machinery etc) can already claim a ‘fuel tax credit’ in their BAS. So, a reduction in the amount of excise being paid will likely lead to a reduction in the fuel tax credits available to these businesses (although ATO have been silent thus far). Therefore, I expect this relief to assist consumers and businesses not entitled to fuel tax credits, but not so much the businesses that use the most fuel.
Heavy Vehicle Road User Charge
It has also announced that the Heavy Vehicle Road User Charge will be reduced to zero for three months, assisting primarily trucking companies. This equates to a saving of 32.4 cents per litre, say a 10% saving on current bowser prices.
GST on Fuel
There are also some market and political chatter about cutting GST on fuel as further temporary relief. At this stage, however, that seems to have been shelved and we find it difficult to understand how this could work practically seeing as GST is levied across such a broad range of goods and services, unless fuel is temporarily turned into a “GST Free” item like fresh food is.
– James Davis
31.03.2026
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