Excise on fuel blending

Fuel blending is the blending of fuel with other fuels or any other substances. It can include the blending of different quantities of like-fuel, for example diesel with diesel.

You need to understand your excise obligations if your business deals in fuel blends.

On this page:

• Manufacture of fuel blends
• Excise obligations

Find out about:

• Entitlement to fuel tax credits for excisable fuel blends
• Fuel blends exempt from excise duty
• Blends no longer considered fuel

Manufacture of fuel blends

We consider that most fuel blending that produces an excisable good (covered by item 10(g) of the Schedule to the Excise Tariff Act) to be manufacture of those goods for excise purposes.

The following are examples of fuel blending considered to be manufacture for excise purposes and where excise duty will apply to the blend:

• Blending fuel with like-fuel, such as blending diesel with diesel (imported or local), when one or both the blend components are underbond.
• Blending a transport gaseous fuel, such as liquid petroleum gas (LPG), with a like non-transport gaseous fuel for transport use.

There are some fuel blends that are excluded and are not considered to be excise manufacture.

Find out about:

• Fuel blends exempt from excise duty
• Excise on gaseous fuels

If you're still unsure of the tax treatment of your blend, you can:

• seek advice from a registered tax agent
• contact us
• apply for a private binding ruling.

See also:

• Item 10(g) of The Schedule to the Excise Tariff Act 1921

Excise obligations

If you manufacture an excisable fuel blend, you must:

• hold an excise manufacturer licence
• report, on an excise return, the quantity of product being delivered into the Australian domestic market
• pay excise duty when applicable.

It's an offence to manufacture or store underbond excisable goods without the relevant licence.

You will need our permission to move any underbond excisable goods to another licensed premises or for export, without first paying the applicable excise duty.

Find out about:

• Excise licences for fuel and petroleum products
• Permissions to move excisable fuel and petroleum products
• Lodging, paying and rates – excisable fuel and petroleum products
• Excise duty rates for fuel and petroleum products
• Calculating the duty payable on excisable fuel blends
• Excise on fuel and petroleum products