Fuel Excise & Heavy Vehicle Charge Changes – What it Really Means for Transport Costs

Recent media coverage suggests these changes will significantly reduce transport costs. In practice, the impact is more limited:

• Fuel excise reduction
• May lower the retail price of diesel
• However, most operators already use fuel levy mechanisms
• Any decrease in fuel costs will be automatically passed through to customers
• Heavy Vehicle Road User Charge (HVRUC) removal
• Increases Fuel Tax Credit (FTC) entitlements
• However, this is largely offset by the reduction in fuel excise
• Resulting in only a marginal net benefit per litre 0.4 cents
• Timing of benefits
• FTC applies only to fuel purchased from 1 April
• Benefits are realised when BAS are lodged not immediately
• This may result in a delay of 1-4 months (e.g. May to August depending on BAS reporting cycle)

Key takeaway:

• There is essentially no cost benefit to transport operators
• Existing pricing mechanisms already pass through most fuel-related savings

If you would like to understand how these changes impact your business or freight arrangements, please contact our office for tailored advice.