Using the volume model to calculate petroleum royalty

The volume model applies to petroleum produced from 1 October 2020.

Royalty is calculated by applying a prescribed rate to the volume of liable petroleum produced during a return period.

Different rates apply to the 4 classes of petroleum:

• domestic gas
• supply gas
• project gas
• liquid petroleum.

These position papers will help you to determine your royalty liability under the volume model:

• Classification of petroleum
• Measurement of petroleum
• Determination of petroleum royalty rates.

Swap arrangements

Swap arrangements entered into by a producer may be relevant for determining the classification of gas and the average sales price for petroleum.

The Commissioner of State Revenue has issued a determination on swap arrangements.

Transitional arrangements

Royalty for petroleum that was produced but not disposed of before 1 October 2020 must be paid for in the annual return period ending 30 September 2020.

Find out more about these transitional arrangements from the previous wellhead value royalty model.

Penalties and interest

Calculating the correct amount of royalty is important because we will impose a penalty of 75% of any understated liability. Unpaid tax interest will also apply to late payments.

Learn more about late lodgement fee, penalty and interest.

Also consider…

• Find out about petroleum and gas tenures.
• Read the resources for petroleum produced from 1 October 2020.
• Learn about lodging royalty returns.
• Read the petroleum guide for OSR Online.