If you run a chipper, crane truck, or stump grinder, the government just put money back in your pocket. On 30 March 2026, the federal government announced the National Fuel Security Plan — and the headline measure is a massive cut to the fuel excise that hits petrol and diesel prices at the bowser. For three months, from 1 April to 30 June 2026, the excise drops from 52.6 cents per litre to just 20.6 cents per litre. That is a 32-cent-per-litre reduction — roughly 61% off the excise component of every litre you buy.
For arborists and tree care businesses that burn through diesel like it is going out of fashion, this is significant. But there is a catch that most people will not realise until BAS time: your fuel tax credit claim drops too. This article breaks down what changed, what it means for your bottom line, what to do on your next BAS, and how to access the ATO’s support package if you are behind on tax.
What Happened: The Fuel Excise Cut Explained
The fuel excise is a federal tax built into the price of every litre of petrol and diesel you buy at the pump. Before 1 April 2026, that excise sat at 52.6 cents per litre. Under the National Fuel Security Plan, the government has cut it to 20.6 cents per litre for three months — covering petrol, diesel, and most other fuels (aviation fuel is excluded).
On top of that, the road user charge — the portion of the excise that funds road infrastructure — has been set to zero for the same period. That means heavy vehicles on public roads also pay the reduced 20.6 c/L rate instead of the usual higher rate.
The cut is temporary. Unless the government announces an extension, the full excise rate reverts on 1 July 2026.
What It Means at the Pump: Real Dollar Savings for Arborists
Arborists are heavy diesel users. Between chippers, stump grinders, crane trucks, tip trucks, and utes towing trailers, fuel is typically 8–15% of total operating costs in a tree services business. The 32 c/L saving hits your fuel bill directly.
Here is what that looks like in practice:
| Business size | Weekly diesel (est.) | Weekly saving (32c/L) | 13-week saving (Apr–Jun) |
|---|---|---|---|
| Solo arborist (1 chipper, 1 ute) | 80 L | $25.60 | $332.80 |
| 2-person crew (chipper + stump grinder + truck) | 150 L | $48.00 | $624.00 |
| 4-person crew (multiple vehicles + equipment) | 300 L | $96.00 | $1,248.00 |
| Large operator (8+ staff, cranes, fleet) | 600 L | $192.00 | $2,496.00 |
That is real money staying in your business account instead of going to the tax office. No paperwork, no application — the saving happens automatically at the bowser.
The FTC Catch: Your Fuel Tax Credit Claim Drops Too
Here is the part most arborists will not twig to until they sit down to do their BAS: the fuel tax credit rate has dropped to match the reduced excise.
The fuel tax credit (FTC) scheme refunds the excise you paid on diesel used in eligible off-road equipment — your chipper, stump grinder, generator, and anything else that does not drive on public roads. Before the cut, you were claiming 52.6 cents per litre back from the ATO. Now, because the excise itself is only 20.6 c/L, the FTC rate drops to 20.6 c/L for the April–June quarter.
Think of it this way: the government is not going to refund you excise you never paid in the first place. You are paying less at the pump, so you claim less on the BAS. The net effect on your hip pocket is roughly the same — but the numbers on your BAS will look very different this quarter.
FTC Rates: Before vs During the Cut
| Fuel use | Rate before 1 Apr 2026 | Rate 1 Apr – 30 Jun 2026 | Change |
|---|---|---|---|
| Off-road diesel (chippers, grinders, generators) | 52.6 c/L | 20.6 c/L | −32.0 c/L |
| Heavy vehicle on-road (4.5t+) | 20.2 c/L | 20.6 c/L | +0.4 c/L |
| Off-road petrol | 52.6 c/L | 20.6 c/L | −32.0 c/L |
Notice something odd? The on-road heavy vehicle rate actually went up slightly, because the road user charge was set to zero. Previously, the heavy vehicle FTC rate was the full excise minus the road user charge. Now both are 20.6 c/L. For most arborists, the off-road rate is the one that matters — and it has dropped significantly.
For a deeper dive into how fuel tax credits work for tree care businesses, read our complete guide to arborist fuel tax credits and GST savings.
What to Do on Your Next BAS
If you lodge BAS quarterly, your next BAS covers 1 April to 30 June 2026 — the entire excise cut period. Here is a step-by-step for getting your FTC claim right:
- Count your eligible litres as normal. Nothing changes about what qualifies for FTC — off-road diesel in your chipper, stump grinder, generator, and other eligible equipment still qualifies. Keep your fuel receipts and hour meter records.
- Use the new rate: 20.6 c/L for off-road diesel. Do not use the old 52.6 c/L rate — that will overstate your claim and may trigger an ATO review.
- Calculate: litres × 0.206 = your FTC amount. For example, 150 litres/week × 13 weeks × $0.206 = $401.70.
- Enter the amount at label 7D on your BAS (Fuel tax credit).
- Lodge on time. The quarterly BAS for April–June is due 28 July 2026 (or 25 August if lodging through a BAS agent).
If you use the simplified method (available if your annual FTC claim is under $10,000), apply the rate that is in force at the end of the BAS period — which for April–June 2026 is 20.6 c/L.
Need a hand with your BAS lodgement? We handle FTC claims as part of our standard BAS service for arborists.
Haven’t Been Claiming FTCs at All? Start Now
If you have never claimed fuel tax credits — and you would be surprised how many arborists have not — this is actually a good time to start. Yes, the rate is lower right now at 20.6 c/L. But 20.6 cents per litre is still free money the ATO is waiting to hand back to you. A solo arborist burning 80 litres a week off-road still picks up $214 for this quarter alone.
More importantly, you can back-claim missed FTC for up to four years. Those prior periods were at the full 52.6 c/L rate. For many arborists, that is $2,000–$10,000+ sitting with the ATO waiting to be claimed. We can amend your prior BAS periods and lodge the back-claims as part of a single engagement. Read more about arborist tax deductions you might be missing.
ATO Fuel Response Support: Payment Plans and GIC Remission
The ATO has also rolled out a fuel response support package aimed at businesses that have been hit by high fuel costs over the past few years. If you have fallen behind on tax payments — GST, PAYG, income tax, superannuation — there is help available until 30 June 2026.
Here is what is on offer:
- Flexible payment plans: Up to 36 months to repay tax debts, with no upfront payment required.
- GIC remission: The ATO can remit (reduce or waive) the general interest charge on your debt where fuel costs have impacted your ability to pay on time.
- PAYG instalment variation: If your income has dropped because of fuel costs, you can vary your PAYG instalments downward so you are not prepaying tax you will not owe.
- No penalties for engagement: The ATO Commissioner Rob Heferen has said they “can’t waive tax debts but can help you pay what you can.” The message is clear — if you pick up the phone, they will work with you.
You can apply through ATO online services (myGov), by phoning the ATO, or through your tax agent. If you are an Arbour Advisory client, we can set this up for you as part of your regular engagement — just let us know.
When It Ends: 1 July 2026 and What That Means
Unless the government extends the measure, the full fuel excise reverts to its pre-cut level on 1 July 2026. Based on normal CPI indexation, that means the excise will go back to approximately 53 cents per litre (the exact figure will be confirmed closer to the date).
What does that mean for you?
- Pump prices go back up — roughly 32 c/L higher than during the cut period.
- Your FTC claims go back UP too — the off-road rate will return to approximately 53 c/L, meaning your BAS refund for Q1 FY27 (July–September 2026) will be significantly larger than the April–June quarter.
- Net effect: You will pay more at the pump but claim more on the BAS. For off-road users, the FTC largely neutralises the excise — which is the whole point of the scheme.
The key thing is to make sure your BAS for July–September 2026 uses the reverted rate, not the temporary 20.6 c/L rate. If you are using an accountant or BAS agent, they should handle this automatically.
Calculate Your Fuel Tax Credit
Want to see exactly how much you could claim this quarter — and what your back-claims might be worth? Use our free fuel tax credit calculator for arborists. We have updated the default rate to 20.6 c/L for the April–June 2026 period. Plug in your litres and see the number.
Frequently Asked Questions
Is the fuel excise cut permanent?
No. The fuel excise reduction from 52.6 c/L to 20.6 c/L is a temporary measure under the National Fuel Security Plan, running from 1 April to 30 June 2026. Unless the government extends it, the full excise rate reverts on 1 July 2026.
Do I still claim fuel tax credits during the excise cut?
Yes — the FTC scheme still operates, but the claimable rate drops to match the reduced excise. For off-road diesel during April to June 2026, the FTC rate is 20.6 cents per litre instead of the previous 52.6 c/L. You should still claim every eligible litre — it is still free money.
What FTC rate do I use on my next BAS?
For the April to June 2026 BAS quarter, use 20.6 cents per litre for off-road diesel and 20.6 c/L for heavy vehicles on public roads (because the road user charge has been set to zero). Check the ATO’s fuel tax credit rate tables for the exact rate for your fuel type.
Can I get an ATO payment plan if fuel costs have hurt my cash flow?
Yes. The ATO’s fuel response support package offers flexible payment plans of up to 36 months with no upfront payment required, plus potential remission of the general interest charge (GIC). Apply via ATO online services or through your tax agent before 30 June 2026.
What happens to fuel tax credits after 30 June 2026?
When the full excise rate reverts on 1 July 2026, the off-road FTC rate is expected to return to approximately 53 cents per litre. This means your FTC claims will increase significantly — but so will the price at the pump. Make sure your BAS for Q1 FY27 uses the reverted rate.
Need Help With Your BAS or FTC Claims?
If you are not sure how to handle the rate change on your next BAS, or you have never claimed fuel tax credits and want to start (including back-claims), give us a call on 02 8378 2421 or book a free 30-minute consultation. We specialise in accounting for arborists and tree care businesses — fuel tax credits, BAS, equipment finance, the lot. No obligation, no jargon, just a clear picture of what you are owed.
George Morice, CA
Arbour Advisory
