Impact of fuel excise changes on operators of heavy vehicles

What does the reduced excise mean for heavy vehicles on public roads?

Fuel tax credits (FTC) provide businesses with a credit for the fuel excise that is included in fuels.  Heavy vehicles travelling on public roads get a smaller FTC for the fuel excise.  The difference is regarded as a ‘road user charge’ (RUC).

Pre-budget, heavy vehicles on public roads received an FTC rebate on excise of 17.8 cents a litre, leaving a RUC of 26.4 cents a litre.  From 30 March 2022, the FTC rebate for these vehicles has reduced to nil.  Meaning effectively the ROU is 22.1 cents a litre, which is only a net benefit of 4.3 cents a litre.

Vehicles > 4.5 tonnes on public road use – Petrol, diesel
Net cost RUC (cents/L)	26.4	22.1	4.3
	Up to 29 March	From 30 March	Benefit / (cost)
Excise (cents/L)	44.2	22.1	22.1
FTC rebate (cents/L)	-17.8	0	-17.8

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Example

Tim has a business called Tim’s trucks.  His truck carries an average of 30 tonnes.  Tim has used the heavy vehicle for travelling on public roads only and purchased 11,430 litres of diesel.

Up to 29 March 2022, Tim paid $5,052 of fuel excise. Tim estimates his FTC rebate to be $2,034, resulting in a net RUC of $3,017.  From 30 March 2022 Tim will pay fuel excise of $2,526 but will not receive any FTC rebate.

As a result, Tim will only see a saving of $491.

Vehicles > 4.5 tonnes on public road use – Petrol, diesel
Net cost RUC	3,017	2,526	(491)
	Up to 29 March	From 30 March	Benefit / (cost)
Excise	$5,052	$2,526	($2,526)
FTC rebate	2,034	0.00	(2,034)

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What does the reduced excise mean for all other businesses?

For all other business users operating light vehicles travelling off public roads or on private roads, or operating heavy vehicles on private roads (for example construction sites, mines, agricultural properties) they will continue to receive an FTC that matches the rate of excise as shown below.

All other business uses (including to power auxiliary equipment of a heavy vehicle) – Petrol, diesel
Net cost RUC	Nil	Nil	Nil
	Up to 29 March	From 30 March	Benefit / (cost)
Excise	44.2	22.1	22.1
FTC rebate	-44.2	-22.1	-22.1

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New FTC rates for fuel acquired from 30 March 2022 to 30 June 2022

Eligible fuel type	Unit	Used in heavy vehicles for travelling on public roads	All other business uses (including to power auxiliary equipment of a heavy vehicle)
Liquid fuels – for example, diesel or petrol	cents per litre	0	22.1
Blended fuels:	cents per litre	0	22.1
Blended fuel	cents per litre	0	9.44
Liquefied petroleum gas (LPG) (duty paid)	cents per litre	0	7.2
Liquefied natural gas (LNG) or compressed natural gas (CNG) (duty paid)	cents per kilogram	0	15.2
B100	cents per litre	0	4.4

FTC rates for fuel acquired from 1 February 2022 to 29 March 2022

Eligible fuel type	Unit	Used in heavy vehicles for travelling on public roads	All other business uses (including to power auxiliary equipment of a heavy vehicle)
Liquid fuels – for example, diesel or petrol	cents per litre	17.8	44.2
Blended fuels:	cents per litre	17.8	44.2
Blended fuel	cents per litre	0	18.955
Liquefied petroleum gas (LPG) (duty paid)	cents per litre	0	14.4
Liquefied natural gas (LNG) or compressed natural gas (CNG) (duty paid)	cents per kilogram	0	30.3
B100	cents per litre	0	8.8