Australia’s 2025 Fuel Tax Credit (FTC) system offers a crucial fuel tax refund for regional drivers and businesses that use fuel away from public roads. Administered by the Australian Taxation Office (ATO), this scheme helps offset rising fuel costs and supports rural operations. Here’s what you need to know.
What Are Fuel Tax Credits?
Fuel Tax Credits are refundable credits for fuel excise and road-user charges, available to businesses and individuals using fuel for eligible purposes, such as:
- Heavy vehicles on public roads
- Off‑road agricultural, mining, forestry, or construction activities
- Auxiliary equipment or machinery powered by liquid fuel
Federal fuel excise is charged at about 46 cents per litre, partially refunded through FTCs based on usage type.
Updated Fuel Tax Credit Rates for 2024–25 & 2025–26
The ATO adjusts FTC rates biannually (February and August). Here are the latest figures:
| Fuel Type & Use | 1 Jul 2024 – 30 Jun 2025 | From 1 Jul 2025 |
|---|---|---|
| Diesel in heavy vehicles on roads | 19.1 c/L | 20.1 c/L (FY25–26) |
| Diesel in off‑road machinery | 49.6 c/L | 50.6 c/L |
| LPG for off‑road use | 16.2 c/L | 16.5 c/L |
| LNG/CNG off‑road | 34.0 c/kg | 34.7 c/kg |
Bulk refunds are claimed via the Business Activity Statement (BAS)
Who Qualifies for the Fuel Tax Refund?
To be eligible, you must
- Hold an ABN
- Use fuel for off-road or eligible on-road heavy vehicle purposes
- Keep comprehensive records, including invoices and usage logs
- Meet environmental criteria: Your vehicle must be ≥ 4.5 t GVM, maintain emissions standards, or be part of an accredited program.
No pre-approval is needed; instead, ensure documentation is ready for potential ATO review.
How to Claim Your Fuel Tax Credit
- Keep fuel purchase records with ABN, date, quantity, vehicle usage
- Ensure vehicle meets eligibility criteria
- Report total fuel used in your BAS
- Calculate fuel tax credit using ATO rate charts
- Lodge BAS by the due date to receive refundable credits
The ATO may audit claims; retain records for five years.
What’s New in 2025?
- Fuel tax credit rates have increased by ~1 c/L for road use and ~1 c/kg for LNG/CNG starting July 1, 2025 .
- ATO emphasizes proper record-keeping to avoid misuse and ensure compliance .
- Regional drivers and heavy users gain the most benefit, helping mitigate higher fuel use in remote areas.
Example Scenario
A regional farmer purchases 2,000 L of diesel for off-road machinery.
- At 50.6 c/L, the total fuel tax credit: $1,012.
- This reduces net fuel costs by effectively refunding the excise.
Tips for Regional Drivers and Operators
- Choose July and February as optimal claim periods post rate update
- Keep fuel purchase receipts with full details
- Maintain vehicle usage logs
- Seek professional advice if unsure about environmental criteria
- Explore logbook or cents-per-kilometre schemes for personal vehicle claims.
The 2025 Fuel Tax Credit system continues to offer vital fuel excise refunds to regional drivers and businesses. With increased rates, proper documentation, and timely BAS lodgment, you could save significantly on fuel costs.
Check your eligibility, organise records, and adjust claims from July to maximise your 2025 fuel tax refunds.
FAQs
Q1: How often are fuel tax credit rates updated?
Rates are reviewed twice yearly—on 1 February and 1 July—based on CPI and road-user charges .
Q2: Can small farmers claim FTC for on-road use?
Yes, if using heavy vehicles (> 4.5 t) on ways related to farming. Off-road machinery claims are also eligible.
Q3: What records are needed to claim fuel credits?
Documents must include fuel invoices, ABNs, vehicle usage purpose, and tonnes/GVM details for eligibility .