- The on-road heavy vehicle fuel tax credit increases from 20.2 c/L to 26.3 c/L from 1 April 2026, because the road user charge has been zeroed.
- Update your “Govt Rebate” line from $0.202 to $0.263. The AIP terminal gate price and GST self-adjust.
- For cold chain operators, motive and reefer fuel tax credits temporarily converge at 26.3 c/L. Keep tracking reefer fuel separately for when rates revert on 1 July.
- This is a three-month measure (1 April to 30 June 2026). Plan now for the reversion.
- The 2022 excise cut pushed on-road FTCs to zero. This time, they go up. The difference: the road user charge was zeroed alongside the excise halving.
On 30 March 2026, the Australian Government announced a three-month halving of fuel excise, effective today. Diesel excise drops from 52.6 cents per litre to 26.3 c/L. Alongside this, the heavy vehicle road user charge drops from 32.4 c/L to zero.
If you run heavy vehicles, this changes three things in your fuel surcharge calculation. Two of them fix themselves. One requires your attention.
What changed, and why the fuel tax credit goes up
The fuel tax credit for on-road heavy vehicles is a simple formula: excise minus the road user charge. Before today, that was 52.6 minus 32.4 = 20.2 c/L. From today, it is 26.3 minus 0 = 26.3 c/L.
This is counterintuitive. Excise has been halved, yet the credit you claim on your BAS is higher than it was yesterday. The reason is that the road user charge, which normally eats into your credit, has been eliminated entirely for three months.
In 2022, excise was halved but the road user charge stayed in place. The halved excise (22.1 c/L) fell below the RUC (26.4 c/L), so the on-road FTC dropped to nil. Heavy vehicle operators received only 4.3 c/L net benefit. This time, by zeroing the RUC simultaneously, the government delivers the full 32.4 c/L saving.
The numbers, side by side
| Component | Before 1 April | 1 April – 30 June | Change |
|---|---|---|---|
| Diesel excise | 52.6 c/L | 26.3 c/L | ↓ 26.3 |
| Road user charge | 32.4 c/L | 0 c/L | ↓ 32.4 |
| FTC (on-road heavy vehicle) | 20.2 c/L | 26.3 c/L | ↑ 6.1 |
| FTC (off-road / auxiliary) | 52.6 c/L | 26.3 c/L | ↓ 26.3 |
| Effective excise borne by operator | 32.4 c/L | 0 c/L | ↓ 32.4 |
How to update your fuel surcharge formula
Most Australian transport operators use a standard fuel surcharge formula. Here is the version used across the industry:
FSC = [(CFP − BFP) ÷ BFP] × Y
Where CFP is the current fuel price (AIP terminal gate price, less GST, less the government rebate), BFP is the base fuel price (locked at contract inception), and Y is the fuel operating cost as a percentage of total freight cost (typically 25%).
Three components of the current fuel price are affected by the excise halving. Here is what you need to do about each one:
1. Terminal gate price: no action needed
The AIP terminal gate price already reflects the excise component. When excise drops, wholesalers recalculate immediately. ACCC monitoring of the 2022 excise cut confirmed that wholesale prices adjusted essentially overnight. Continue sourcing the weekly AIP diesel TGP for your city as normal.
2. GST: no action needed
GST at 10% is calculated on the excise-inclusive price. Lower excise means lower GST. When you divide the TGP by 1.1 to strip GST in your formula, this recalculates automatically.
3. Government rebate (fuel tax credit): update required
This is the one manual change. Your fuel surcharge matrix likely has a “Govt Rebate” line representing the fuel tax credit. Update this from $0.202/L to $0.263/L, effective for all calculations using a TGP dated from 1 April 2026 onwards.
Do not change your base fuel price or its associated historical rebate figure. The BFP is a locked reference point from contract inception.
Adelaide diesel TGP: $2.85/L (post-excise cut, inclusive of GST)
Ex-GST: $2.85 ÷ 1.1 = $2.5909
Less new Govt Rebate: $2.5909 − $0.263 = $2.3279 (new CFP)
Compare to a pre-cut TGP of $3.10/L: Ex-GST $2.8182, less old rebate $0.202 = $2.6162 (old CFP)
The CFP drops by roughly 29 cents per litre, which flows through the surcharge formula to reduce the percentage charged to customers.
Cold chain operators: motive and reefer fuel converge
Refrigerated transport operators claim fuel tax credits at two different rates. Diesel powering the truck (motive fuel) attracts the on-road heavy vehicle rate. Diesel powering the refrigeration unit (reefer fuel) qualifies as auxiliary equipment and normally attracts the full excise rate with no RUC deduction.
Under normal conditions, that creates a significant gap: motive fuel at 20.2 c/L versus reefer fuel at 52.6 c/L. The ATO’s Practical Compliance Guideline PCG 2016/11 provides a simplified method, allowing operators to claim 10% of total fuel at the higher auxiliary rate.
During the temporary period, both rates converge at approximately 26.3 c/L. The premium for separately tracking reefer fuel disappears temporarily.
Maintain your reefer fuel tracking systems despite the temporary convergence. When excise reverts to its full rate on 1 July 2026 and the RUC is reinstated, the 32.4 c/L advantage of separate auxiliary tracking will immediately resume. Switching methods mid-year creates compliance risk.
What to do today: the checklist
Update immediately
- Change “Govt Rebate” from $0.202/L to $0.263/L in your current fuel price calculation
- Continue sourcing the AIP terminal gate price as normal
- Continue dividing TGP by 1.1 to remove GST
- Shift to weekly surcharge recalculation during this volatile period
- Communicate the change to customers proactively
Do not change
- The base fuel price or its historical rebate/GST treatment
- The fuel operating cost percentage (Y factor)
- The GST divisor (still 1.1)
- Your reefer fuel apportionment method
Monitor closely
- Whether AIP TGPs fall by the expected 26 to 29 c/L in the first week of April
- ATO publication of the official updated rate table for 1 April to 30 June 2026
- Any announcements about extending the measures beyond 30 June 2026
What to tell your customers
Customers will see a lower fuel surcharge and may ask questions. Here are the key points to communicate:
The fuel surcharge is mechanically recalculating downward due to two government measures: halved excise and a zeroed road user charge. This is a temporary three-month measure running to 30 June 2026. Surcharges will recalculate upward when rates revert. International diesel benchmarks remain elevated, and the excise cut only partially offsets the underlying price increase driven by Middle East supply disruptions. The surcharge formula is transparent and auditable against published AIP data and ATO rates.
For operators who update surcharges weekly, customers will see the adjustment flow through in the next calculation cycle. For those on monthly or quarterly updates, consider an interim adjustment given the significance of the change.
What happens after 30 June?
The excise is legislated to revert to its full rate on 1 July 2026. The road user charge will also be reinstated, though the next scheduled 6% annual increase has been deferred by six months. This means the post-reversion FTC rate may differ slightly from the pre-crisis 20.2 c/L, depending on the August 2026 CPI indexation of excise and whatever RUC rate applies.
Plan now. When rates revert, your “Govt Rebate” line reverts too. Building a dated schedule of which rate applies in which period will save headaches at BAS time, particularly for the June quarter where the rate changes mid-period.
Frequently Asked Questions
The on-road heavy vehicle FTC increases from 20.2 c/L to 26.3 c/L because the road user charge has been zeroed. The FTC equals excise minus the RUC. With the RUC at zero, the full halved excise flows through as a credit.
Use 26.3 c/L for on-road heavy vehicles (over 4.5 tonnes GVM) for the period 1 April to 30 June 2026. For off-road or auxiliary use (including reefer units), use 26.3 c/L as well, as both rates converge during the temporary period.
No. The AIP TGP reflects excise at the wholesale level. When excise drops, the posted TGP drops automatically. Continue sourcing your city’s diesel TGP as normal.
Yes. Reefer diesel qualifies as auxiliary equipment use. Normally this attracts the higher FTC rate (full excise, no RUC deduction). During the temporary period, both on-road and auxiliary rates converge at 26.3 c/L. The ATO’s PCG 2016/11 provides a simplified 10% apportionment for refrigerated vehicles.
In 2022, the RUC stayed in place. The halved excise fell below the RUC, so the FTC dropped to nil. In 2026, the RUC has been zeroed alongside the excise halving, so the full halved excise flows through as a credit.
The March quarter BAS (January to March) uses the pre-cut rate of 20.2 c/L throughout. The June quarter (April to June) should use 26.3 c/L for the full period, assuming the measures remain in place. Keep fuel purchase records dated precisely for audit purposes.
Sources and References
- Prime Minister of Australia, “Fuel excise halved for three months”, media release, 30 March 2026.
- ATO, Fuel tax credit rates, 1 July 2025 to 30 June 2026.
- ATO, Powering auxiliary equipment (heavy vehicles).
- ATO, PCG 2016/11: Simplified fuel apportionment.
- Australian Trucking Association, “Trucking industry welcomes fuel tax decision”, 30 March 2026.
- Minister for Infrastructure, “Fuel excise halved for three months”, 30 March 2026.
- Australian Institute of Petroleum, Terminal Gate Price data.
- ACCC, Fuel and petrol monitoring.
Need help with fuel tax credits or BAS lodgement?
National Accounts advises transport and logistics operators across Australia on fuel tax credits, excise compliance, and fleet taxation. If the temporary rate changes are creating complexity for your business, we can help.
