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What is fuel blending

Understand which fuel blends are subject to excise.

Last updated 14 May 2023

Manufacture of fuel blends

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.

Most fuel blending that produces an excisable good is considered manufacture of those goods for excise purposes. They are covered by item 10(g) of The Schedule to the Excise Tariff Act 1921.

The following examples are considered excise manufacture, 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.

Businesses that manufacture fuel blends in Australia may be entitled to fuel tax credits for excisable fuels they use in their fuel blends.

Exempt fuel blends

Some fuel blends are exempt from excise duty. These include fuel blends not considered to be excise manufacture and blends containing fuel components that are no longer considered to be fuel.

Fuel excise obligations

If you manufacture an excisable fuel blend, you must:

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

Note: Excise duty rates are indexed twice a year. Check the current rate when calculating the duty payable.