July 2026 Fuel Excise Cut: What Novated Lease Drivers Need to Know
The Albanese Government is cutting fuel excise by 16c/litre for July 2026. Here's what it means if you're on a novated lease — or considering one.
The Albanese Government has introduced the Treasury Laws Amendment (Fuel Excise Relief No. 2) Bill 2026, cutting fuel excise on petrol and diesel by 16 cents per litre from 1 July to 2 August 2026. According to the Treasury Ministers release, the measure is designed to ease cost-of-living pressure while fuel prices remain elevated. The Heavy Vehicle Road User Charge is also reduced by 16 cents for the same window.
This is a short-term, one-month extension — not a permanent change. It follows an earlier round of excise relief and is explicitly framed as temporary. If you're budgeting fuel costs into a novated lease arrangement, that context matters.
What this means for novated lease customers
If you have a novated lease that includes a fuel budget (sometimes called a 'running cost' or 'operating cost' component), a temporary drop in pump prices can mean you end up underspending your fuel budget for July. Depending on how your lease is structured, any underspend may roll over, be reconciled at end-of-year, or require a budget adjustment — check with your lease manager.
For anyone weighing up a petrol or diesel car versus an EV under a novated lease, this is worth keeping in perspective. A one-month excise cut doesn't change the structural cost advantage that EVs already carry under the FBT exemption. Fuel savings from the excise relief are modest and temporary; the FBT exemption for eligible EVs is a recurring annual benefit. If the excise relief influenced you toward a combustion vehicle, run the full numbers before committing — the July saving is a one-liner in a multi-year lease.
The cut also has no direct impact on your FBT position or the pre-tax salary packaging treatment of your lease repayments. Those are governed by separate ATO rules, not fuel excise legislation.
Common questions
Does the July fuel excise cut affect my novated lease repayments?
No. Your lease repayments are calculated on the vehicle's cost and finance terms, not the fuel excise rate. The cut only affects what you pay at the bowser during July 2026.
Will my novated lease fuel budget automatically adjust for the excise cut?
Not automatically. Your fuel budget is set at the start of the lease based on estimated usage and prevailing prices. If pump prices drop materially in July, you may underspend that month. Most lease managers reconcile running costs periodically — contact yours if you're unsure.
Does this change the case for getting an EV on a novated lease?
Not meaningfully. The excise cut is one month long. The FBT exemption for eligible zero- and low-emission vehicles operates across the full lease term and is a substantially larger structural benefit than a temporary fuel discount.
When does the excise cut expire?
According to the Treasury Ministers release, the cut runs from 1 July and ends 2 August 2026. There is no announced extension beyond that date at this time.
I drive a lot for work — should I be doing anything differently in July?
If your novated lease includes a fuel card or reimbursement component, filling up during July locks in the lower price. Beyond that, no structural action is required.