Australia’s trucking industry is warning businesses and consumers to prepare for higher freight costs following a sharp diesel price spike.
The market price for diesel jumped from about A$130 per barrel on February 27 to nearly A$220 per barrel late last week, while retail diesel prices have risen almost 19 cents per litre in just days.
Australian Trucking Association CEO Mathew Munro said fuel remains one of the highest operating costs for trucking businesses, and sudden increases have an immediate impact on freight pricing.
“Fuel is typically one of the top three costs for a trucking business. Any increase in fuel prices has a big impact,” Munro said.
Many transport companies apply fuel levies that automatically adjust invoices when diesel prices change. Others rely on periodic contract reviews, meaning cost increases can take longer to flow through supply chains.
Munro said operators without automatic fuel levy arrangements may need to bring forward rate reviews or renegotiate contract terms to reflect the higher fuel costs.
“Trucking businesses need to review their costs and, if necessary, have open conversations with their customers about the need to bring forward the next fuel levy adjustment or rate review.”
He also warned that trucking companies may experience delays in fuel deliveries due to increased demand as operators respond to the price surge.
According to Munro, trucking businesses cannot absorb sustained increases in diesel prices because margins across the industry are already extremely tight.
“Our industry is already under extreme pressure, with one in every 12 businesses closing in the 12 months to November 2025.”
The diesel price spike has also renewed attention on Australia’s fuel security, a longstanding issue for the transport sector.
As a member of the International Energy Agency, Australia is required to maintain oil stocks equivalent to 90 days of net imports. Current stockholding levels remain well below that threshold.
Munro said around three billion litres of diesel are currently held under the minimum stockholding obligation scheme, equivalent to about 33 days of supply.
Combined with other reserves, Australia’s total oil stocks are estimated to represent about 50 days of net imports in IEA terms.
“The Australian Government has made progress on Australia’s fuel security, but it’s been a problem for many years.”
“Australia needs to have the 90 days of net import cover that we signed up to hold.”
Munro said the current diesel price spike also highlights the importance of ongoing discussions about rate review mechanisms across the freight contract chain.
The Australian Trucking Association has argued that transport contracts should include yearly rate reviews and more frequent adjustments tied specifically to fuel costs.
While those reforms are being considered as part of Fair Work Commission deliberations on road transport contract chain rules, any changes are unlikely to take effect until at least 2027.
In the meantime, Munro said the immediate priority for trucking operators is clear communication with customers about rising costs and maintaining transparency across supply chains.