Australian fuel excise halved for three months
On 30 March 2026, the Federal Government announced that the fuel excise on petrol and diesel would be halved for three months from 1 April 2026 to 30 June 2026.
The temporary halving of the fuel excise will reduce the cost of fuel by 26.3 cents per litre, resulting in the cost of a 65L tank of fuel reducing by nearly $19 from what would have been payable had the initiative not been introduced.
The Federal Government will also reduce the heavy vehicle road user charge to zero for three months. Future increases in the heavy vehicle road user charge will also be deferred for six months.
The temporary reduction to zero will support the efficient movement of goods, ease cost pressures across supply chains, and help stabilise freight costs during a period of heightened global volatility.
The short-term tax relief outlined above forms part of the March 2026 National Fuel Security Plan, which is intended to ease pressure from rising fuel prices driven by recent global events in the Middle East, helping to alleviate impacts on households and businesses.
In addition, the Federal Government has also introduced amendments to enable the Fair Work Commission (FWC) to fast-track road transport contractual chain order applications (RTCCOs), allowing it to quickly lift rates for truck drivers.
Australian Taxation Office response to high fuel costs impacting Australian business
On 1 April 2026, the Australian Taxation Office (ATO) recognised the effect of rising fuel costs on some Australian businesses and introduced targeted support to assist eligible businesses in managing these challenges.
For the period from 1 April 2026 to 30 June 2026, the following support measures may be provided to taxpayers who are unable to meet their payment obligations:
- Streamlined access to more flexible payment plan arrangements, including longer payment terms, no upfront payment, and access to general interest charge (GIC) remission where payment and lodgment conditions are met;
- Remission of GIC and other penalties where high fuel costs will be a relevant factor in consideration of additional requests for remission; and
- Support to vary pay as you go (PAYG) instalments where there has been a reduction in taxable income.
Next steps
If you’d like guidance on how these developments may affect your business, or require assistance to access support from the ATO, please reach out to your local Nexia Advisor. Our team is ready to provide tailored advice and support.
