In the 2022 Federal Budget, excise and excise-equivalent customs duty on petrol and diesel will be reduced by 50% from 30 March 2022 for 6 months.
At 7:30pm (AEDT) on 29 March 2022, the Treasurer Josh Frydenberg handed down the 2022-23 Federal Budget. One of the main items in this budget is a temporary cut to fuel excise by 50% for 6 months.
From 12:01am on 30 March 2022, the excise and excise-equivalent customs duty will be reduced by 50%. The reduction in fuel excise will be in place for 6 months, ending at 11:59pm on 28 September 2022.
The 50% reduction will change the excise to 22.1 cents per litre, and applies to petrol, diesel and all other fuel and petroleum-based products except for aviation fuels.
When do I get my cheaper petrol?
Usually, petrol stations will hold up to a week’s fuel at any one time at stock on hand. Therefore, it is expected that the reduction in fuel prices at the bowser will be available for drivers in about a week at the latest.
However, the ACCC closely monitors the price behaviour of retailers to ensure that the lower excise rate is fully passed on to motorists.
Interaction with fuel tax credits
Businesses who use heavy vehicles with a gross vehicle mass greater than 4.5 tonnes on public roads will have a corresponding adjustment to their fuel tax credits over the next 6 months. This is because the fuel tax credit is intended to be a refund of the fuel excise paid by businesses when acquiring fuel.
For heavy vehicles on public roads, the fuel tax credit is reduced by the road user charge. The road user charge is a partial payment of excise made by businesses and currently sits at 26.4 cents per litre.
As the temporary excise is being reduced to 22.1 cents, which is below the road user charge, this effectively reduces the fuel tax credit to zero.
At this stage, it is too early to determine how the Australian Taxation Office (ATO) will administer the technical issue surrounding fuel tax credit claimants for the 31 March 2022 Business Activity Statement. However, once amending legislation is enacted we would expect the ATO to provide further guidance.
Please call us if you wish to discuss this any further. We would be delighted to speak with you about the latest Federal Budget.