06 May Will Reduced Fuel Excise Cuts Reduce Price Pressure?
In the recent Federal Budget, the Coalition halved the fuel excise from 44.2 cents to 22.1c per litre in response to soaring prices. However whilst most drivers are expected to see savings of approximately 22cents per litre, the trucking industry has renounced the measure as futile.
In a move made simultaneously to the fuel excise cut, the Coalition has removed the diesel rebate, which is used by all transport providers when calculating their fuel levy. This has effectively cancelled out any reduction in fuel costs for transport providers, regardless of the reduction in the fuel excise.
According to transport providers, prior to these changes trucks would receive 17.8c back from the 44.2c fuel excise, leaving a gap of 26.4c. This gap is called Road User Charge (RUC). However, now that the excise is 22.1c and the tax credit is zero, truck drivers will only see a minute saving of 4.3c per litre less than before the announcement, leading to concerns that the government had not sufficiently addressed industry concerns that the ever increasing fuel prices would impact each stage of the supply chain, resulting in overall price increases for end consumers.
Across the Tasman, New Zealand has also introduced a temporary transport relief package, reducing RUC rates by 36% between 21 April 2022 and 21 July 2022. This RUC reduction offers savings on par with Australia’s excise duty cut of 25 cents a litre.
If you have any further queries, please contact our helpful team.
Yours sincerely,
Rachael Budd & The Transolve Global Team
Sorry, the comment form is closed at this time.