Operators must pass on diesel price hikes, industry warns

Heavy vehicle operators must act quickly to protect their businesses as diesel prices soar amid escalating tensions in the Middle East, warns South Australian Road Transport Association (SARTA) Executive Officer Steve Shearer.

Shearer said the threat of significant increases at the bowser is already becoming apparent in some areas and is likely to intensify in the coming weeks, placing further financial pressure on trucking operators already operating in a difficult commercial environment.

According to Shearer, many transport businesses simply cannot afford to absorb higher fuel costs and must ensure those increases are passed through to customers via fuel levies or other pricing mechanisms.

“For too long too many customers have abused their road transport providers and pressured them to absorb increases in fuel prices,” Shearer said.

“In today’s very tough commercial environment, that’s a recipe for disaster for your trucking business.”

Shearer warned that trucking operators who continue to absorb higher fuel costs risk undermining the viability of their businesses and the wider freight sector.

“This industry simply does not have the capacity to sustain absorbing increased fuel prices,” he said.

He urged freight customers to accept that higher diesel prices will inevitably lead to higher freight charges.

“Customers must be reasonable and realistic and accept that they’ll have to support their road freight transport providers, who underpin their own businesses, by paying realistic increases in fuel levies,” Shearer said.

Shearer also criticised customers who refuse to accept fuel surcharge adjustments and instead seek alternative operators willing to absorb the cost increases.

“Customers who refuse to do this and say they’ll just use another transport operator who’s not passing on the fuel price hikes will be acting in an un-Australian way and be responsible for harming the industry and ultimately their own business through the collapse of trucking businesses,” he said.

The SARTA chief also raised concerns about the treatment of subcontractors within the freight sector, particularly in arrangements involving larger prime contractors.

Shearer said many large transport operators pass fuel price increases on to their own customers but fail to pass those same increases through to subbies.

“You can bet that they charge their end customers fully for fuel price increases,” he said.

“Yet too many prime contractor heavy vehicle operators refuse to pay their subcontractors the same amount.”

Shearer described that practice as “unconscionable and abusive business practice” and said it must stop.

“Whether it’s one of the big four or just a large trucking and logistics business, they absolutely know what the price of fuel is and they should not abuse their subcontractors by only paying fuel levies at rates they know are well under what the fuel is actually costing the subcontractor,” he said.

Shearer also called on governments and pricing authorities to take action against fuel retailers who rapidly increase prices.

“It would help if the fuel stations sold the fuel that was already in their underground tanks, which they’ve already paid for, at fair prices instead of price gouging by pushing up prices on existing stock and blaming it on the Middle East situation,” he said.

“The government and pricing authorities should act now to stop that un-Australian practice.”

Family-owned Ross Transport said last week the diesel price increases would cost them an extra $15,000 a day just to keep their trucks on the road.

Australian Trucking Association CEO Mathew Munro also said Australian consumers and businesses must be ready to pay more as the cost of diesel rises.

The market price for diesel has increased from A$130 on Friday, February 27 to almost A$220 per barrel. Retail diesel prices have increased almost 19 cents per litre since March 1, the ATA said late last week.

Munro said that trucking businesses operated on very tight margins and would have to pass the increases in fuel prices onto their customers.

“Some trucking businesses have fuel levies that automatically adjust their invoices as the price of fuel changes,” Munro said.

“Others depend on periodic rate reviews or don’t have rate review provisions in their contracts at all.

“Trucking businesses need to review their costs and, if necessary, have open conversations with their customers about the need bring forward the next fuel levy adjustment or rate review.

“Operators also need to plan for delays in filling fuel orders because of the increased demand.

“Trucking businesses cannot be expected to absorb the cost of increased fuel prices. Our industry is already under extreme pressure, with one in every 12 businesses closing in the 12 months to November 2025.”

Munro said the ATA and its members had campaigned since 2014 to strengthen Australia’s fuel security. As a member of the International Energy Agency (IEA), Australia is required to hold oil stocks equivalent to 90 days of net imports.

“The ATA pushed back against the previous government’s plan to store Australia’s fuel reserves in the United States, on the other side of a very wide ocean,” he said.

“We also worked with the industry department on the 2021 legislation that established the current national fuel reserve.”

Under its minimum stockholding obligation rules, fuel importers and refiners are required to hold baseline levels of fuel.

Munro said about three billion litres of diesel are held under the obligation, enough to last 33 days.

“The fuel is in Australia or on ships nearby. Our total oil stocks are equivalent to 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 rise in the price of diesel showed the importance of the ATA’s submission to the Fair Work Commission (FWC) about the contractual chain order it is considering. The FWC has the power to issue orders covering the whole of the road transport contract chain.

“In our submission, we supported a requirement for yearly rate reviews, but with more frequent reviews of the price of fuel unless a contract already includes a fuel levy mechanism,” he said.

“Those requirements won’t come into force until late 2027 at the absolute earliest. The solution for now is for trucking companies to monitor their costs and talk to their customers.

“For our part, the ATA will continue talking to the government and fuel suppliers to understand how we’re placed and to emphasise the critical importance of road freight transport to everyone in Australia,” he said.

Article published by Big Rigs 09/03/2026