If your business uses fuel, another fuel tax credit rate change could affect how much you can claim on your next BAS.
Whether you use fuel in off-road vehicles such as utes, plant and equipment, generators, agricultural machinery or a fleet of heavy vehicles, it’s important to use the correct fuel tax credit rate for the fuel you acquired.
The August 2026 adjustment is the fourth fuel tax credit rate movement this year, making it particularly important to keep your records up to date and match your claims to the correct acquisition dates.
A quick recap of the 2026 fuel tax credit changes
Fuel tax credit rates have changed several times during 2026:
- 2 February 2026: Routine CPI indexation.
- 1 April 2026: The government temporarily reduced fuel excise on petrol and diesel and set the heavy vehicle road user charge to zero. This reduced the fuel tax credit rate for eligible fuel acquired during the relief period.
- 1 July 2026: Rates changed again when the temporary fuel excise relief ended.
- 3 August 2026: Rates were adjusted again following routine CPI indexation.
The CPI indexation factor applying to rates from 3 August 2026 is 1.020.
Because different rates apply during different periods, your business records need to show when the fuel was acquired.
Why do fuel tax credit rate changes matter?
Fuel tax credits allow eligible businesses to claim a credit for some of the fuel tax included in the price of eligible fuels used for business activities.
When the fuel tax credit rate changes, the amount you can claim per litre can also change.
The key issue is timing.
Generally, you need to use the fuel tax credit rate that applies when you acquired the fuel. This means a single BAS period may include fuel purchased under two or more different rates.
You should therefore avoid applying the latest rate to every litre purchased during the BAS period.
Which businesses may be affected?
Fuel tax credits can apply to a wide range of Australian businesses, including:
- Sole traders and small businesses using eligible fuel in business vehicles, plant or equipment. However, fuel used in light vehicles travelling on public roads is generally not eligible.
- Tradies and contractors using fuel for plant, generators and other equipment on worksites.
- Primary producers using fuel in tractors, pumps, harvesters and other eligible equipment.
- Transport operators using heavy vehicles on public roads.
- Businesses that store bulk fuel and draw it down for business use over time.
The applicable rules and rates depend on factors such as the type of fuel, how it is used and where it is used.
Fuel tax credit rates for eligible fuel used in heavy vehicles travelling on public roads can also be affected by changes to the heavy vehicle road user charge.
This can apply to both liquid fuels, such as petrol and diesel, and gaseous fuels, such as CNG and LNG.
What if your BAS period crosses a fuel tax credit rate change?
This is where accurate record keeping becomes particularly important.
If your BAS period covers fuel acquired under more than one fuel tax credit rate, you may need to separate the litres according to their fuel acquisition dates and apply the correct rate to each period.
For example, if you purchased fuel before and after a rate change, those purchases may need to be calculated separately rather than applying one rate to the entire claim.
Using the wrong rate could result in:
- Under claiming, meaning you receive less than you’re entitled to; or
- Over claiming, which may need to be corrected later and could result in additional tax or other consequences.
If you claim less than $10,000 in fuel tax credits each year, you may be able to use the rate that applies at the end of the BAS period. However, check that this simplified method applies to your circumstances before relying on it.
Practical tips for your next BAS
To help get your fuel tax credit claim right:
- Keep records showing fuel purchase dates, litres and fuel type.
- Separate fuel used for public-road travel from eligible off-road business use.
- Identify and exclude private or non-business use where required.
- Keep records for fuel held in bulk storage and how it is used.
- Check which fuel tax credit rate applies to each acquisition period.
Use the ATO Fuel Tax Credits calculator to check the applicable rates and calculate your claim.
Need help with fuel tax credits?
Fuel tax credit rules can become complicated when your business uses different types of fuel, operates heavy vehicles, has auxiliary equipment or has a mixture of private, public-road and off-road use.
If you’re unsure which fuel tax credit rate to use or how to calculate your claim, talk to your adviser before lodging your next BAS.
Getting the calculation right can help you claim what your business is entitled to while avoiding unnecessary adjustments later.
Published 11 September 2026