The fuel excise cut that was set to expire on 30 June has been extended for another month. The relief is smaller, and it is the last step before prices revert.

The Albanese Government has confirmed it will keep a fuel excise discount in place through July, rather than letting it lapse as scheduled. The current 32 cents a litre discount will be reduced to 16 cents a litre from 1 July, running through to 2 August.

For builders, tradies and anyone running diesel-heavy operations, the short version is this. The relief has not ended, but it is now half of what it was, and it is tapering toward a return to full prices in August.

What has actually changed

Since April, the excise on petrol and diesel has been cut sharply as a temporary cost-of-living measure, brought in after the conflict in the Middle East drove up global oil prices. That original cut delivered a discount of around 32 cents a litre at the bowser.

From 1 July, that discount halves. The Government has framed the extension as making petrol and diesel 16 cents per litre cheaper than normal prices for July, saving around $11 on a 65-litre fill.

There is a second part that matters more for anyone running heavy vehicles. The Government will also reduce the Heavy Vehicle Road User Charge by 16 cents for the same period. For the three months to June, that charge had been set to zero, which was a meaningful saving for operators of trucks, concrete agitators and plant over 4.5 tonnes. From July it returns, but partially offset.

The Government has framed July as a graduated step rather than a hard stop. The Treasurer described the extra month of fuel discount as helping motorists and businesses as the support tapers off, and the measure is structured to ease demand at service stations toward the end of the month.

Why this is not the end of the story

The July extension is a wind-down, not a reprieve. The discount halves now, and on current settings the remaining relief comes off entirely in early August.

There is also a separate date worth marking. Fuel excise is indexed to inflation twice a year, and the next scheduled indexation lands in early August. That means even after the temporary discount disappears, the underlying rate is set to tick up again on its own. For builders budgeting fuel across the back half of the year, the trend is one direction.

In practical terms, the cost of running site vehicles, plant and deliveries has been artificially low for a few months. That cushion is being removed in two stages. The first stage is 1 July. The second is early August.

The Fuel Tax Credit angle for builders

For GST-registered builders claiming Fuel Tax Credits, the changing excise rate flows directly through to what you can claim back. The credit you recover is tied to the excise actually payable on the fuel, so as the discount shrinks and then disappears, the credit rate moves with it.

The detail that trips people up is timing. The ATO works on the date fuel was acquired, not the date it was used. Fuel bought in June under the larger discount carries a different rate to fuel bought in July, and again to fuel bought from August. If you are running a fleet or storing diesel on site, that means more than one rate can apply within a single BAS period.

It is worth being clear-eyed about one limit here. For a standard work ute or van at or under 4.5 tonnes driven on public roads, Fuel Tax Credits do not apply at all, regardless of how much of the driving is for work. The credits are for heavy vehicles and for off-road use such as excavators, generators and other plant. Many builders try to claim the ute and get knocked back.

The takeaway is simple. Keep your fuel records clean across June, July and August, split by acquisition date, and use the current ATO rate for each period rather than copying the figure from your last statement.

What builders should do now

This is a planning moment more than a panic one. The relief is still there in July, just smaller, and the real reset is a few weeks away.

A few things are worth doing while the timeline is clear. Rebuild your fuel budget for July onwards on the basis that the bowser discount is now 16 cents, not 32. Have the conversation with major suppliers and subcontractors about how their pricing handles the road user charge returning, before it surfaces as a variation you did not see coming. And tidy your Fuel Tax Credit records before the end of the financial year, because the multiple rate changes across this period are exactly the kind of thing the ATO looks at closely.

Fuel has been one of the few input costs moving in builders’ favour this year. From July, that advantage starts to unwind. Knowing the two dates that matter, 1 July and early August, is the difference between absorbing the change quietly and being caught out by it. It is the kind of cost discipline that separates the builders who understand the numbers behind their business from those who do not.

General Information Only: This article is intended for general informational purposes and does not constitute professional, legal or financial guidance. Figures relating to fuel excise, the Heavy Vehicle Road User Charge and Fuel Tax Credits are subject to change and indexation. Builders should confirm current rates with the ATO and seek appropriate professional advice before acting on any information contained herein.

Author: TGB Editorial