Fuel Excise Relief July 2026: Does It Change the Novated Lease Equation?
The Albanese Government has cut fuel excise by 16 cents per litre for July 2026. Here's what that actually means if you're considering a novated lease. Read on.
On 22 June 2026, the Albanese Government introduced the Treasury Laws Amendment (Fuel Excise Relief No. 2) Bill 2026, cutting fuel excise on petrol and diesel by 16 cents per litre for the period 1 July to 2 August 2026. According to the Treasury Ministers release, this is designed to ease cost-of-living pressure for Australian motorists and businesses.
This is a short-term, one-month measure — not a permanent change to the excise rate. The Heavy Vehicle Road User Charge is also being reduced by 16 cents for the same window, which matters more to fleet operators than to typical novated lease holders.
What this means for novated lease customers
If your novated lease includes a fully-maintained package — where fuel costs are bundled into your pre-tax salary deductions — a temporary excise cut could marginally reduce your actual fuel spend during July. Whether that saving flows back to you depends on how your lease package is structured and how your employer's fleet manager accounts for it. It's worth checking with your provider.
For anyone sitting on the fence between a petrol or diesel vehicle and an electric vehicle (EV), this cut is worth putting in perspective. A 16 cents per litre reduction for one month does not change the long-run cost arithmetic of petrol ownership versus an EV on a novated lease. EVs remain exempt from Fringe Benefits Tax (FBT) under the current federal policy, a benefit that applies for the full lease term — not just 30 days. The structural tax advantage of a novated EV lease is not something a short-term excise cut erases.
If you drive a petrol or diesel vehicle and your lease does not include bundled fuel, you'll simply pay a little less at the pump in July — the same as any other driver. There's no special novated lease mechanism that amplifies or reduces the benefit here.
Common questions
Does the fuel excise cut affect my novated lease repayments?
No, your scheduled repayments are set at lease inception and won't change. If fuel is bundled into your package, there may be a minor variance in your fuel budget for July, but this depends on your specific arrangement.
Should I delay buying a petrol car until after the excise relief period ends?
Probably not — a one-month excise cut of 16 cents per litre is unlikely to materially affect the total cost of ownership over a 3-5 year novated lease term. The bigger levers are the FBT treatment of the vehicle, your marginal tax rate, and the vehicle's running costs.
Does the excise cut apply to EV charging costs?
No. The cut applies to petrol and diesel excise only. EV charging is not subject to fuel excise, so this measure has no direct impact on EV running costs.
Is the FBT exemption for EVs still in place during July 2026?
Yes. The FBT exemption for eligible battery electric and plug-in hybrid vehicles under the Treasury Laws Amendment (Electric Car Discount) Act is a separate, ongoing measure and is unaffected by this excise relief legislation.
How do I know if my novated lease includes bundled fuel?
Check your lease schedule or salary packaging statement — it will list whether fuel is included as a budgeted item. If you're unsure, contact your novated lease provider directly.