This paper identifies the fuels that are taxed, the forms that the taxes take and, where possible, quantifies the amounts collected.
There are various estimates of the value of government subsidies to fossil fuels in Australia. These estimates range from around $8 billion to $12 billion annually. Fossil fuels are also taxed.
The Australian Government taxes a variety of fossil fuels. They include crude oil and condensate, natural gas, liquefied petroleum gas, ethane, compressed natural gas, and ‘refined’ petroleum products such as petrol and diesel.
Taxes that the Australian Government imposes can be classified as income (direct) or indirect. Direct taxes take the forms of excise duties, customs duties, and the goods and services tax (GST). Excise duties apply to petrol, diesel, ‘other’ fuel products (such as aviation fuels), and crude oil and condensate. Credits for excise paid are available to some users of fossil fuels—notably the mining, agriculture and transport sectors—under the Fuel Tax Credits Scheme. Customs duty applies to imports of ‘excise-like’ fuels, for example, petrol and diesel. The GST applies to households’ consumption of energy—such as electricity and natural gas—and other goods and services that embody fossil fuels in their prices.
The Australian Government also imposes a number of ‘indirect’ taxes on the profits of fossil fuel producers such as coal and petroleum extraction companies. The Petroleum Resource Rent Tax (PRRT) applies to profits from the recovery of some offshore petroleum production. Company tax applies to the profits of companies including those engaged in fossil fuel extraction and processing.