Fuel Excise Cut April 2026: What the National Fuel Security Plan Means for Your Business and BAS

Fuel just got cheaper. Not because global oil prices shifted overnight, but because the Australian Government announced the National Fuel Security Plan on 30 March 2026 and halved the fuel excise from 1 April 2026.

For most Australians, that means about 26 cents less per litre at the bowser. Good news, obviously. But if you run a business that claims fuel tax credits on your BAS, there is something more specific you need to know: your credit rates have changed, and getting this wrong will mean either overclaiming (and facing ATO scrutiny) or underclaiming (and leaving money on the table).

This article covers what changed, who it affects, and exactly what to do with your next BAS.

What the National Fuel Security Plan Actually Changed

The measure is straightforward. From 1 April 2026, the fuel excise on petrol, diesel, and most other liquid fuels has been cut in half. The standard excise rate before the cut was 52.6 cents per litre, indexed to CPI as of February 2026. That is now approximately 26.3 cents per litre for a temporary 3-month period.

There are two other changes that matter specifically for businesses:

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  The heavy vehicle road user charge has been reduced to zero for the same 3-month period
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  The next scheduled increase in the heavy vehicle road user charge has been deferred by 6 months

Both of these directly affect fuel tax credit calculations for heavy vehicles used on public roads.

One important caveat: the ATO has confirmed these measures on its fuel response page, but noted they are subject to legislation passing Parliament. Updated fuel tax credit rates will be published on the ATO website as the legislation is finalised. Check the ATO fuel tax credit rates page for the most current figures before finalising any BAS claim from 1 April 2026 onwards.

A Quick Refresher: What Are Fuel Tax Credits?

Fuel tax credits allow eligible businesses to claim back the fuel excise included in the price of fuel, provided that fuel is used in qualifying business activities. The scheme is administered by the ATO, and claims are made through your Business Activity Statement (BAS).

The businesses that benefit most are those using significant quantities of fuel in machinery, plant, equipment, or heavy vehicles. Think:

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  Farming and agricultural operations
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  Mining and resources businesses
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  Construction contractors using plant and equipment
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  Transport companies operating heavy vehicles
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  Landscaping and civil works businesses
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  Manufacturing operations with on-site machinery

The rate you can claim depends on three things: when you bought the fuel, what type of fuel it is, and what activity you used it in. Off-road use in heavy machinery generally attracts the highest rate. Fuel used in light vehicles (under 4.5 tonne GVM) travelling on public roads does not qualify at all.

If you have never claimed fuel tax credits but think you might qualify, the ATO's fuel tax credits overview for businesses is a good place to start. It is one of those claims that many eligible businesses simply never make because they do not know it exists.

How the Excise Cut Changes Your Fuel Tax Credit Claim

Here is where it gets practical.Fuel tax credit rates are linked to the fuel excise rate. When the excise goes down, the credit rate goes down with it. That sounds like bad news, but it is not as simple as that. The excise cut reduces the fuel excise embedded in the pump price, and the credit rate adjusts to match. The net effect on what you can legitimately claim reflects your actual excise cost.

What you cannot do is continue claiming at the pre-April rate after 1 April 2026. That would be overclaiming, and the ATO's data-matching systems will pick it up.

For heavy vehicles on public roads, the change is more significant.

Normally, fuel tax credits for heavy vehicles on public roads are calculated as the excise rate minus the road user charge. With the road user charge now reduced to zero for 3 months, and the excise itself halved, the calculation changes materially. Check the updated ATO rates table once published to confirm the exact figures for your vehicle type.

We have seen this before. In 2022, the government ran a near-identical temporary excise reduction from 30 March to 28 September. Businesses that stayed on top of the rate changes and updated their BAS claims accordingly were fine. Those who applied the wrong rate, in either direction, created BAS errors that needed to be amended. Some of those amendments took months to sort out.

Use the ATO's fuel tax credit calculator once the updated rates are confirmed. Do not estimate.

What to Do If Your BAS Period Crosses 1 April 2026

This is where most people get tripped up. If your BAS period runs from, say, 1 March to 31 March 2026, you are fine, the cut has not started yet, and your rates are unchanged. But if your BAS period includes any dates from 1 April 2026 onwards, you need to apply different rates for different portions of the period.

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  Fuel purchased before 1 April 2026 uses the pre-cut rate
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  Fuel purchased from 1 April 2026 onwards uses the updated reduced rate

You need dated fuel records to do this accurately. Purchase receipts, fuel logs, or fleet management records all work. If you use an approximation method, you need to be able to justify how you calculated the split if the ATO ever asks.

Businesses claiming under $10,000 in fuel tax credits annually can use the BAS period-end rate if the rate changed during the period, but for most businesses with larger claims, splitting the period accurately is the right approach. When in doubt, speak to your accountant before lodging.

How Long Does the Fuel Excise Cut Last?

Three months. The current measure runs from 1 April 2026 and is expected to end on approximately 30 June 2026.

After that, fuel excise returns to the standard rate unless the government extends the measure through further legislation. There has been no announcement of an extension as of the time of writing. Do not budget for the reduced rate continuing beyond June without confirmation.

When the excise returns to the full rate, fuel tax credit rates will revert accordingly. If you are a regular claimant, set a reminder to update your rates again in July 2026 for your July 2026 BAS.

This Has Happened Before: What We Learned

The 2022 temporary excise reduction ran for exactly 6 months. The businesses that handled it cleanly had a few things in common:

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  They checked the ATO rates page before lodging any BAS in the affected period
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  They kept fuel purchase records dated by day, not just by month
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  They did not apply the simplified period-end rate method for large claims during a rate-change period
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  They used the ATO's fuel tax credit calculator, not their own memory of what the rate used to be

The businesses that had problems were the ones that did not realise the rate had changed, applied the old rate for months, and then had to amend multiple BAS statements when the error was caught. Amending BAS statements is not catastrophic, but it is time-consuming and creates a compliance record.

The lesson is simple. Rate changes are not fire-and-forget; they require a specific action at a specific time. This one is the same.

Under the proposed framework, these assets may need accurate and regularly updated valuations to calculate earnings properly.

What Adelaide Small Businesses Should Do Right Now

If you manage your own BAS lodgement and claim fuel tax credits, here is a practical list:

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  Check the ATO fuel tax credit rates page for updated April 2026 rates. The ATO has confirmed these are being published shortly
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  Update your ATO fuel tax credit calculator settings once updated rates are available
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  Separate your fuel purchases by date before and after 1 April 2026 for any BAS period that crosses the boundary
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  Note the end date of approximately 30 June 2026, and plan to update rates again for the July quarter BAS
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  If you are not currently claiming fuel tax credits but use significant fuel in eligible activities, talk to your accountant; you may have unclaimed entitlements going back up to 4 years

If your bookkeeping or BAS lodgement is managed by our team at The Kalculators, we are already across these changes and will apply the correct rates to your claim. No action required on your part; we will handle it.

Conclusion

Fuel excise was halved from 1 April 2026. If you claim fuel tax credits, your rates have changed. Wait for the ATO to publish the updated rate table, then apply those rates to any fuel purchased from 1 April onwards.

It is not complicated. But it does require a specific action at a specific time. Miss it and you will either overclaim (ATO problem) or underclaim (your own problem).

If you would rather someone else handle it, our BAS lodgement team in Adelaide is aware of these changes. We manage fuel tax credit claims for businesses across South Australia as part of our bookkeeping and BAS services. Book a consultation or call us on (08) 7480 2593.