Calculating theoretical petroleum and diesel excise and duty

Because excise goods are taxed by the measurement of volume (litres, sticks or kilograms) rather than their transaction value (as with the goods and services tax), we first estimate a volume gap. The volume gap for a particular petroleum product is an estimate of the volume subject to excise or duty delivered into the domestic market, less ATO and Australian Border Force clearance data for that product.

The revenue gap is then determined by multiplying the volume gap by the appropriate excise tariff rate.

To estimate theoretical petroleum and diesel excise liability for an individual excisable petroleum product, we:

  1. Estimate the consumption of diesel and petroleum products in Australia. Consumption estimates are based on the sales data of particular petroleum goods published in Australian Petroleum Statistics. For the purposes of the calculation, we assume the inventory is untaxed until it leaves the terminal gate. It is calculated as follows:

This image shows the equation for calculating derived volume sold.

  1. Compare this amount to the value of actual clearances through the excise or duty system.
  2. Multiply the difference by the tariff rate applicable for the financial year.

Mass to volume conversion

The Australian Petroleum Statistics inventory data (for the end of each financial year) is published as a mass (in tonnes), while all other quantities (imports, exports, production) are reported in volume (megalitres). We convert this to volume data using average conversion factors (shown in the table below). These conversion factors are derived from several sources. Natural variation around these figures creates some error in the gap estimate.

Petroleum product density – average values


Density (kg/m3)

Automotive gasoline




The product density estimates are commensurate with values supplied by industry. For example, the Shell data sheet gives a typical density for unleaded E10 (with 10% ethanol) of 735.0 kg/m3. BP’s product specification for unleaded petrol states their density is typically between 720 and 740 kg/m3.

The density for Shell Extra automotive diesel is guaranteed to lie between 820 and 850 kg/m3, with a typical value of 830 kg/m3. The Exxon Mobil website states that the maximum density for its B20 diesel (blended with 20% biodiesel) is 860 kg/m3.

These fact sheets are listed in References.

    Last modified: 05 Nov 2015QC 47278