tHE nATIONAL fUEL sECURITY pLAN
A plan (of sorts) has been announced to ensure we don’t suffer more fuel shortages than we need to, and help for individuals and businesses to cope with the increased costs that come with fuel shortages (i.e. pricing pressure). The plan is implemented in “stages”, depending on how bad the Government views the crisis.
Stage 1:
- “Business as usual”
- Comment: Don’t expect to be back here for a while…
Stage 2 (where we are at today):
- Minor fuel shortages at petrol stations
- Only buy the fuel you need (i.e. don’t “panic buy”)
- Fuel excise halved from 1 April 2026 to 30 June 2026 (26.3c per litre cut)
- Heavy vehicle road user charge scrapped from 1 April 2026 to 30 June 2026 (additional 6.1c per litre cut for heavy vehicles)
- ATO debt asssitance for impacted businesses
Stage 3:
- “Practical measures to help reduce fuel use” and “practical measure to reduce fuel demand” (translation, soft fuel rationing)
- Eating into our fuel reserves to cover fuel shortages (currently the minimum required limit is around 25 days, this will be reduced by around 5 days)
- Other unspecified assistance
Stage 4:
- “Framework to support the allocation of fuel” and “prioritisation of fuel supplies” (translation, active fuel rationing)
- Using up fuel reserves
- Increasing public transport options
- Other unspecified assistance
The Practical Impact
What you really want to know is how this impacts you…
Petrol Prices
Between 1 April 2026 and 30 June 2026, the fuel excise will be halved. This will reduce the price of fuel by 26.3 cents per litre directly at the bowser. This will make a 50L tank of fuel $13.15 cheaper.
Fuel Tax Credits & the Heavy Vehicle Road User Charge
Between 1 April 2026 and 30 June 2026, the heavy vehicle user charge will reduce to NIL. In effect, this reduces the fuel excise charged to operators of heavy vehicles to NIL.
Practically, this is implemented by increasing the fuel tax credit available to heavy vehicles to 26.3 cents per litre (up from 20.2 cents per litre). This also means that operators will not see the benefits of this until their BAS’s are lodged (as that is when the fuel tax credit is given).
For those that aren’t aware, the general premise is that the fuel excise is there to fund the general maintenance of the roads, however, there are times that it is considered fair that some (or all) of this excise is refunded to businesses – and this is done in the form of fuel tax credits (which is submitted on their BAS statements).
For example, if you use fuel in your farm machinery, because the machinery is not being used on the roads, it would be unfair for the farmer to pay the fuel excise – therefore they get to claim back that fuel excise on their BAS (as a fuel tax credit). It’s also considered unfair for businesses running large transportation trucks to pay the full excise – and a partial fuel tax credit is given to these businesses of 20.2c per litre.
The amount they don’t get refunded (i.e. the difference between the 52.6c fuel excise and the 20.2c fuel tax credit) is consisered the “heavy vehicle road user charge“, which is essentially the amount of the fuel excise heavy vehciles have to pay.
The heavy vehicle road user charge is currently 32.4c, but with the Government halving the excise, this drops to 6.1c (being the new fuel excise amount of 26.3c less the 20.2c fuel tax credit). The Government is effectively saying that heavy vehicle operators don’t have to pay that last 6.1c for 3 months.
ATO Assistance for Businesses
In addition to the above, the ATO is offering access to a 36 month payment plan where your business is severely impacted by fuel prices and the reason for you not being able to pay your debt is because of the additional cost of fuel (which we suggest will largely be transport businesses). You need to be up to date with lodgments, and the payment plan can be used for existing debts and new debts (e.g. March BAS which is due soon).
The ATO has detailed information available at https://www.ato.gov.au/individuals-and-families/financial-difficulties-and-disasters/ato-fuel-response/ato-fuel-response-payment-plan.
What Comes Next?
It seems relatively clear that a form of fuel rationing is next on the agenda for the Government. Stage 3 (the next stage) is “practical measures to help fuel use”, and will no doubt be more than the odd advertisement asking people to limit their use. There will be something implemented that will reduce fuel use, but done in a way that avoids the negative connotations of “fuel rationing”.
One way this could be achieved is in the form of “encouragement” for businesses to move staff to work-from-home wherever possible, and we would recommend businesses start planning for a possible work from home mandate. Not a COVID level mandate, but something that will get a significant number of people off the road.
Another option would be increasing the fuel excise (i.e. making fuel more expensive to force you to buy less). That would seem counter-intuitive given the Government has just cut the excise, but pricing pressure is often an effective deterrent.
The Government has indicated that nothing is off the table at this point and discussions are ongoing about what comes next. Businesses (and individuals) should be planning “for the worst”, just in case we do end up at stage 4. It is better to have a plan and not need it, than not have a plan and wish you spent 30 minutes coming up with one.