Fuel Tax Regulation 2016

Administered by Department of the Treasury

Legislation au F2016L01376 Regulations In force Legislative Instrument

Legislation content

EXPLANATORY STATEMENT

Issued by authority of the Minister for Revenue and Financial Services

Fuel Tax Act 2006

Fuel Tax Regulation 2016

Section 95-100 of the Fuel Tax Act 2006 (the Act) provides that the Governor‑General may make regulations prescribing matters required or permitted by the Act to be prescribed, or necessary or convenient to be prescribed for carrying out or giving effect to the Act.

The purpose of the Fuel Tax Regulation 2016 (Regulation) is to remake the Fuel Tax Regulations 2006 (former Regulations). The Legislation Act 2003 (Legislation Act) provides that all legislative instruments, other than exempt instruments, progressively ‘sunset’ according to the timetable set out in the Legislation Act. Legislative instruments registered on the Federal Register of Legislation (previously known as the Federal Register of Legislative Instruments) on 30 June 2006, such as the Fuel Tax Regulations 2006, sunset on 1 October 2016. When a legislative instrument sunsets, it is automatically repealed under section 50 of the Legislation Act.

The Regulation remakes the Fuel Tax Regulations 2006, and makes improvements by simplifying existing provisions through consolidating repeated requirements and improving readability. In addition to remaking the former Regulations, the Government has identified opportunities to improve and streamline some of the arrangements in the Act.

Further details of the Regulation are set out in the Attachment.

The Act does not specify any conditions that need to be met before the power to make the Regulation may be exercised.

The Regulation is a legislative instrument for the purposes of the Legislation Act.

Government stakeholders including the Australian Taxation Office and the Department of Infrastructure and Regional Development were consulted for the remake of the Fuel Tax Regulations 2006. An exposure draft of the Regulation was not released for public consultation given the Regulation does not make a substantive change to the Fuel Tax Regulations 2006 and the impact upon taxpayers is negligible.

Before this Regulation was made, its expected impact was assessed using the Preliminary Assessment tool approved by the Office of Best Practice Regulation (OBPR). The assessment indicated that the likely regulation impact is minimal or machinery. This assessment has been confirmed by the OBPR (OBPR reference 20886).

The Regulation commenced on 1 October 2016.

Statement of Compatibility with Human Rights

Prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011

Fuel Tax Regulation 2016

This Legislative Instrument is compatible with the human rights and freedoms recognised or declared in the international instruments listed in section 3 of the Human Rights (Parliamentary Scrutiny) Act 2011.

Overview of the Legislative Instrument

The Fuel Tax Regulation 2016 (Regulation) remakes the Fuel Tax Regulations 2006 (former Regulations). The Legislation Act 2003 (Legislation Act) provides that all legislative instruments, other than exempt instruments, progressively ‘sunset’ according to the timetable set out in the Legislation Act. Legislative instruments registered on the Federal Register of Legislation (previously known as the Federal Register of Legislative Instruments) on 30 June 2006, such as the former Regulations, sunset on 1 October 2016. When a legislative instrument sunsets, it is automatically repealed under section 50 of the Legislation Act.

The Regulation remakes the Fuel Tax Regulations 2006 and makes improvements by simplifying existing provisions through consolidating repeated requirements and improving readability. In addition to remaking the former Regulations, the Government has identified opportunities to improve and streamline some of the arrangements in the Act.

Further details of the Regulation are set out in the Attachment to the Explanatory Statement.

Human rights implications

This Legislative Instrument does not engage any of the applicable rights or freedoms.

Conclusion

This Legislative Instrument is compatible with human rights as it does not raise any human rights issues.


ATTACHMENT

Details of the Fuel Tax Regulation 2016

All references are to the Fuel Tax Regulation 2016 (Regulation) unless otherwise stated. 

The Regulation makes improvements to the Fuel Tax Regulations 2006 (former Regulations) by repealing redundant provisions and restructuring provisions to take account of modern instrument drafting techniques such as the greater use of headings and tables. The Regulation also simplifies and updates language in accordance with standard drafting practices. For example, provisions in the former Regulations are referred to as ‘regulations’, however provisions in new principal instruments, such as the Regulation, are now referred to as ‘sections’. Principal instruments are also now referred to as ‘Regulation’ rather than ‘Regulations’. These restructuring and updating changes do not change the current operation of the equivalent provisions in the former Regulations. These changes and other changes that require further explanation are identified and explained in this Attachment. 

Section 6 - Fuel tax credit for fuel to be sold or packaged

 

Section 6 of the Regulation restructures regulation 41-10 of the former Regulations to consolidate repeated packaging requirements and minor amendments were made to simplify and improve the readability of section 6. These amendments do not impact the scope and operation of regulation 41-10 of the former Regulations. Packaging requirements for fuels such as kerosene, mineral turpentine and white spirit have been amended to be consistent with the packaging requirements for other fuels prescribed by the Regulation.

 

Section 7 – Working out the effective fuel tax for fuel blends

 

Regulation 43-7 of the former Regulations has been remade into section 7 of the Regulation. Minor changes were made to improve readability. These amendments do not impact the scope and operation of regulation 43-7.

 

Conversion rate for road user charge

 

The Regulation did not remake regulation 43-10 of the former Regulations which allowed the Road User Charge (RUC) expressed in cents for each litre of fuel to be converted to a rate in cents for each kilogram of fuel. This regulation was designed to provide some flexibility so that the RUC, which reduces the amount of fuel tax credits under section 43-10 of the Fuel Tax Act 2006 (the Act) can be applied to liquefied natural gas (LNG) and compressed natural gas (CNG) powered heavy vehicles on-road.

 

 

 

 

 

 

 

Instead the Government intends to amend section 43-10 of the Act to provide ongoing structural flexibility for the Transport Minister to determine rates for the RUC in units of weight, volume or energy. For example, taxpayers who purchase fuels sold in kilograms (such as LNG or CNG) would be able to apply the RUC expressed in cents for each kilogram of fuel directly rather than undertake a conversion process. Such changes would also allow the RUC to be adapted to new forms of fuel used in the future.

 

The Government intends to introduce the amendments into Parliament as soon as practicable.

 

 

 

 

Overview

The Fuel Tax Regulation 2016 was enacted to address the sunsetting of the Fuel Tax Regulations 2006, as mandated by the Legislation Act 2003. This regulation was issued under the authority of the Minister for Revenue and Financial Services and aims to remake the former regulations while simplifying and improving readability. The regulation consolidates repeated requirements and updates the language in accordance with modern drafting practices, without altering the scope and operation of the original provisions. Government stakeholders, including the Australian Taxation Office and the Department of Infrastructure and Regional Development, were consulted during the development of this regulation, which was assessed to have minimal or machinery impact on taxpayers. The regulation commenced on 1 October 2016, and it has been deemed compatible with human rights as it does not engage any of the applicable rights or freedoms under the Human Rights (Parliamentary Scrutiny) Act 2011. The regulation is a legislative instrument for the purposes of the Legislation Act, and it represents a streamlined and updated version of the previous regulations, ensuring that the provisions remain relevant and effective.

Scope and Application

The Fuel Tax Regulation 2016 applies to entities and individuals involved in the supply and consumption of fuel within Australia, ensuring compliance with the provisions of the Fuel Tax Act 2006. This regulation affects various industries, including those involved in the production, distribution, and retail of fuels such as gasoline, diesel, and liquefied natural gas. It governs the calculation and application of fuel tax credits and the conversion rates for the Road User Charge (RUC) in relation to fuel blends. The regulation aims to simplify existing provisions by consolidating repeated requirements and improving readability, thereby facilitating compliance and ensuring the efficient operation of fuel tax credits. The scope of the regulation extends across the Commonwealth of Australia, governing fuel transactions and related tax credits uniformly. However, the regulation does not extend to certain fuels, such as kerosene, mineral turpentine, and white spirit, for which specific packaging requirements have been updated. Additionally, the regulation does not address the conversion of the RUC for road user charges related to liquefied natural gas and compressed natural gas, which will be amended through future legislative changes. The regulation commenced on 1 October 2016, replacing the previous Fuel Tax Regulations 2006 which sunsetted under the provisions of the Legislation Act 2003.

Key Provisions

The Fuel Tax Regulation 2016 (Regulation) serves to remake the previous Fuel Tax Regulations 2006, incorporating improvements and simplifications to enhance readability and efficiency. Section 6, for example, restructures regulation 41-10 of the former Regulations, consolidating repeated packaging requirements and making minor amendments to improve clarity without altering the existing scope or operation. Similarly, section 7 of the Regulation updates regulation 43-7, making readability improvements without changing its scope or operation. These changes aim to maintain the current operational framework while making the regulations more user-friendly and straightforward. The Regulation imposes several obligations and requirements on parties and entities governed by the Fuel Tax Act 2006. For example, fuel suppliers must ensure that fuel intended for sale or packaging meets the specified packaging requirements as outlined in section 6. Furthermore, taxpayers must accurately calculate the effective fuel tax for fuel blends as per section 7, ensuring compliance with the stipulated regulations. Although the Regulation does not introduce new substantive requirements, it consolidates and streamlines existing obligations, making it easier for entities to understand and comply with the relevant provisions. Breaches of the provisions under the Fuel Tax Regulation 2016 may result in civil and criminal consequences. The Act itself provides for various offences and penalties, although specific penalties are not detailed in the Regulation. Generally, non-compliance could result in fines, penalties, or other enforcement actions as stipulated in the Fuel Tax Act 2006. It is essential for entities to adhere to the requirements set forth in the Regulation to avoid potential legal repercussions, including financial penalties and other legal actions that may be taken against them for non-compliance. In summary, the Fuel Tax Regulation 2016 aims to streamline and improve the readability of the existing Fuel Tax Regulations 2006 by consolidating repeated requirements and updating language to reflect modern drafting practices. While it does not introduce new substantive requirements, it ensures that the regulations remain clear and accessible for those required to comply with them. Entities governed by the Act must ensure they meet the obligations set out in the Regulation to avoid potential civil or criminal penalties.

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Sourced from the Federal Register of Legislation at 26 August 2026. For the latest information on Australian Government law please go to https://www.legislation.gov.au.