Blog & Updates

How will the carbon tax affect fuel prices?

Author: Barry Scott / Published Date: 21 July 2011

Categories: Novated Leasing, Consultancy

So here it is, the much debated carbon tax.
Let’s just cut to the chase, how will the carbon tax affect fuel prices..

For most of us?

It will not have any direct and immediate effect on the price of fuel.

“Households, on-road business use of light vehicles and the agriculture, forestry and fishery industries will not face a carbon price on the fuel they use for transport."
Australian Government – Clean Energy Future


For employees who salary package their cars with novated leases – this is all you need to know, for now.

The top 500 polluting companies will be charged $23 per tonne of carbon emitted, and assuming fuel companies are within the top 500 – it remains to be seen as to whether any of these additional costs would be passed on to fuel prices.

Interestingly enough however, the price of fuel has actually gone down since the introduction of the carbon tax on 1st July.

  • Average weekly unleaded petrol price for the week ending 26th June: $1.417
  • Average weekly unleaded petrol price for the week ending 10th July:  $1.390

Source: Australian Institute of Petroleum

In three years from now?

The Government has charged an independent research and advisory body – the Productivity Commission – with advising on a number of long-term economic, social and environmental issues, and fuel excise is on the agenda.

The commission presents its findings in three years from now, and we would not be surprised to see lower carbon-emitting fuels receiving preferential tax treatments thereafter.

This would certainly reflect what has just been introduced for some categories of commercial vehicle.

For off-road commercial vehicles?

Organisations with commercial vehicles used in an off-road situation effectively pay no excise on their fuel as a result of the fuel tax credits scheme. This tax offset facility has now been changed.

Over the next three years, the tax credits are to gradually reduce at a rate that reflects the carbon content of the emissions of the fuel concerned. After the introduction of the emissions trading scheme in 2015-2016, the credits will be based on the price of carbon – and will be adjusted on a bi-annual basis.

Industries that are exempt from this change are agriculture, forestry, and fisheries.
For all other industries – the price of fuel has just gone up.

For heavy commercial vehicles?

The Government intends to apply a carbon price to commercial vehicles over 4.5 tonnes used on roads from 1 July 2014, however this has not been agreed to by the Multi-Party Climate Change Committee.

For alternative fuels?

Renewable fuels such as ethanol, bio-diesel and renewable diesel have zero carbon emissions, and will not be affected at all.

Will it affect the Australian automobile industry?


If any of the manufacturers made the top 500 polluters list, then yes, the carbon tax would certainly have an immediate affect on the industry. Organisations that provide parts may also be included in this list , and it appears that energy is set to become more expensive too, so it would be highly unlikely for the industry to come out of this without feeling the indirect effects of the tax.

If you look at the introduction of the tax as an indicator of attitudes, it is impossible to believe that the automobile industry is not about to go through, and has indeed already begun, a massive change.

We’ll be addressing the carbon tax in greater detail in our next edition of the The Autopian.

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Capitalise on the FBT budget changes

Author: Barry Scott / Published Date: 12 July 2011

Categories: Events, Novated Leasing, Consultancy

The recent FBT budget changes represented the biggest change to the vehicle salary packaging industry in almost 25 years.

Although a shift in the landscape like that generates a lot of work for an organisation such as ours, it was an exciting time.

“We love that the tax office has given us some new rules
     to play with.”
Jeffrey Morton, Managing Director, Autopia

The culmination of all of that work was the development of two new strategies that organisations can use in order to take advantage of the change in regulations, as opposed to suffering because of them.

We presented these strategies, along with our detailed analysis of the changes, and the effects on businesses and employees – at a briefing in Sydney in May.

The briefing was repeated online, and a recording of the webinar is now available for those who missed it first time around

If you currently operate a vehicle salary packaging program, or if you’re thinking about introducing the benefit, you need to know what opportunites have been presented by these FBT changes, and you need to know the potential pitfalls ahead.

For a link to the recording, just ask Linda.

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