The temporary halving of Australia’s fuel excise expires on June 30, and for builders and trades running diesel-heavy operations, the timing matters.

Since April 1, the excise on petrol and diesel has been reduced by 60.9%, bringing the rate down from the standard 52.6 cents per litre to 26.3 cents per litre. That relief ends at midnight on June 30, and the federal government has indicated it is unlikely to extend the measure, with Energy Minister Chris Bowen describing it as a temporary response to global supply pressures.

For residential builders, the direct cost impact sits across two areas: your own site vehicles and plant, and every supplier, subcontractor and delivery running diesel to get materials and labour on site.

The Fuel Tax Credit Question

Builders registered for GST have been claiming Fuel Tax Credits (FTCs) throughout the cut period, but the calculation is not as straightforward as it looks. While businesses pay a lower excise when purchasing fuel, the credit recovered is also lower, meaning the net benefit is not the full 26.3 cents per litre.

The ATO requires businesses to record the date fuel was acquired, the volume, the type and how it was used, so if your records across April to June are patchy, it is worth tidying them up before the end of financial year.

From July 1, the full excise rate returns. FTC claims will reflect that higher rate again, but so will pump prices.

What About the Heavy Vehicle Road User Charge?

The Heavy Vehicle Road User Charge was also reduced to zero for the same three-month period, with the next scheduled increase deferred by six months. That deferred increase will eventually flow through to transport and freight costs, which builders absorb indirectly through material deliveries and subcontractor pricing.

It is worth having a conversation with your major suppliers now about how their pricing is structured post-July, before variations become a surprise.

The Practical Read

The fuel excise cut was introduced in response to a specific global trigger. Disruption to the Strait of Hormuz, a shipping lane that typically carries a fifth of the world’s oil and LNG, drove the spike in Australian fuel costs that prompted the government to act. Whether those conditions ease before June 30 or not, the measure was always legislated with an end date.

For builders managing tight project budgets through the second half of 2026, the July 1 return to full excise is a known cost shift worth factoring into your forecasts now rather than absorbing it as a surprise.

Check your fuel spend, confirm your FTC records are clean, and talk to your accountant before EOFY if the numbers are material to your business.

THE GOOD BUILDER TAKE

This is not a major shock to the system. But it is a known variable arriving at a time when margins are already thin. The builders who will absorb it best are the ones who have already accounted for it. If you haven’t, June 30 is three weeks away.

More news on Fuel: NSW Toughens Fuel Price Laws. What It Means for Builders Watching Every Dollar at the Bowser.

Author: TGB Editorial