Global oil prices have risen significantly since the Russian invasion of Ukraine. The Government will help reduce the burden of higher fuel prices at home by halving the excise and excise-equivalent customs duty rate that applies to petrol and diesel for 6 months.
Assistant Minister for Road Safety and Freight Transport, Scott Buchholz MP said he cannot remember a period of time when we have had such a significant cut to fuel excise.
“I welcome the cut to the fuel excise, every time Australians, be it motorists or the transport sector, fill up their tank, for the next 6 months,” Mr Buchholz said.
“Whether you’re line haul between capital cities or running round the city, it will cost truckies less.
“This cut in fuel excise, which takes effect from midnight tonight, will flow through to the bowser over the next 2 weeks as retailers replenish their stocks.”
The excise and excise-equivalent customs duty rates for all other fuel and petroleum-based products, except aviation fuels, will also be reduced by 50 per cent for 6 months.
The Government is responding in a temporary, targeted and responsible way to reduce cost of living pressures experienced by Australian households and small businesses.
The measure will commence from 12.01am on 30 March 2022 and will remain in place for 6 months, ending at 11.59pm on 28 September 2022.
Under the measure, existing policy settings for fuel excise and excise-equivalent customs duty, including indexation in August, will continue but on the basis of the halved rates.
At the conclusion of the 6 month period the excise and excise-equivalent customs duty rates will then revert to previous rates, including indexation that would have occurred on those rates during the
6 month period.
The rate of excise and excise-equivalent customs duty currently applying to petrol and diesel is 44.2 cents per litre. This measure will halve the rate on petrol and diesel to 22.1 cents per litre from 30 March 2022, with the price faced by consumers expected to be reduced by a larger magnitude given GST will be levied on the lower excise rate.
The Australian Competition and Consumer Commission will monitor the price behaviour of retailers to ensure that the lower excise rate is fully passed on to Australians.
This targeted measure to provide temporary relief from fuel price pressures will be legislated to end on 28 September 2022.
This measure is estimated to decrease receipts by $5.6 billion, and decrease payments by $2.7 billion over the forward estimates period.
Implications for Heavy vehicles – road user charges
Heavy vehicles travelling on public roads have their fuel tax credit reduced by the RUC. This means that not all fuel excise is refunded for heavy vehicles travelling on public roads.
The Government is not changing the existing RUC arrangements for heavy vehicles travelling on
public roads, but the temporary reduction in fuel excise will provide a net benefit for heavy vehicle
operators of 4.3 cents per litre from 30 March, compared to current settings.
This is because the RUC is currently 26.4 cents per litre of fuel used and, from 30 March 2022, the
excise paid by heavy vehicles will be 22.1 cents per litre, which is less than the RUC. The FTC for heavy
vehicles on public roads will reduce to nil.
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