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Author: Marcus Hale, Fleet Operations and Business Efficiency Writer
The past few months have been a wake-up call for Australian businesses that run on diesel. What started as a geopolitical event happening somewhere far away became, very quickly, a direct hit on operating costs for every transport operator, fleet manager, tradie, and logistics company in the country.
Fuel prices in Australia surged. Stations ran dry. Margins got squeezed. And a lot of businesses found out the hard way that they had very little buffer against that kind of shock.
Prices have eased somewhat since the worst of it. But the situation is far from settled, and the structural vulnerabilities this crisis exposed aren’t going away when it does. This article looks at where fuel costs are likely to go, what that means for fleet and transport businesses, and what you can actually do about it right now.
What Happened and Where We Are Now
When the US and Israel launched military strikes on Iran in late February 2026, the knock-on effect on global oil markets was immediate. Average terminal gate prices for diesel increased by around 91% from 20 February to the end of March, reaching over 308 cents per litre across Australia’s five largest cities.
That’s not a modest price movement. That’s a near-doubling of wholesale diesel costs in about five weeks. For any business where diesel is a primary operating cost, that’s the kind of shock that changes the economics of the whole operation overnight.
The government moved to cushion the blow. The Australian Government reduced the fuel excise by 32 cents per litre from 1 April to 30 June 2026, and also paused the heavy vehicle Road User Charge for the same period.
Since the reduction in fuel excise, Australian retail diesel prices are down around 39% and petrol prices are down around 36% for Australia’s five largest cities as at mid-June. Recent declines in international benchmark prices have also helped bring prices down.
So things are better than they were at the peak. But better than the peak of a crisis is not the same as normal. Experts warn that potential shortages and higher prices could persist into the second half of 2026, with sustained global stability required for full recovery.
Why Australia Is Particularly Exposed
This crisis didn’t come from nowhere. It exposed something that energy analysts have been flagging for years.
Australia imports roughly 90% of its liquid fuel. This means world crude oil prices have a direct impact on pump prices. Australia’s current emergency strategic fuel reserve is non-compliant with IEA requirements and has been since 2012.
Australia is one of the world’s most fuel-import-dependent economies. The Australian government is now spending close to $15 billion to address a crisis that experts have been warning about since the closure of the last large domestic refineries.
There’s also a currency dimension that most people don’t factor in. Fuel purchases are predominantly denominated in US dollars while domestic sales occur in Australian dollars. A 10% depreciation in the Australian dollar typically translates to 15 to 20 cents per litre increase at service stations, even when international oil prices remain stable.
This means that even if the Middle East situation fully resolves, Australian fuel prices remain exposed to currency movements and global oil market fluctuations in ways that are not going away any time soon.
What the Outlook Looks Like for the Rest of 2026
The outlook for diesel prices remains uncertain. Prices are being impacted by the US-Israel war with Iran and geopolitical tensions in the Middle East, the tentative ceasefire and failed peace talks, ongoing Russia-Ukraine negotiations, and rising US oil inventory stock levels.
A meaningful, sustained fall in pump prices requires either a resolution to the Middle East conflict, a significant reopening of the Strait of Hormuz, or a sharp drop in global crude demand. None of those things are guaranteed or imminent.
Economists at Westpac warn the longer the conflict goes on, the worse the effects on the Australian economy. A widely accepted rule of thumb is that every US$10 increase in the price of a barrel of oil adds around 10 cents to the fuel pump in Australia.
Oxford Economics models a prolonged war scenario where world GDP slows significantly and the Australian economy contracts in consecutive quarters. Business planning needs to account for sustained elevated costs for at least the rest of 2026.
The government’s fuel excise cut runs until 30 June. A reported 3.9 billion litres of crude, diesel, jet and petrol are scheduled to arrive from overseas in the next four weeks, and fuel stocks are at above average levels, the second highest since mandatory stockholding obligations began. That’s encouraging. But the excise cut ending, combined with ongoing geopolitical uncertainty, means the second half of 2026 could bring renewed price pressure.
For fleet and transport businesses, planning on the basis that prices will simply return to pre-conflict norms is not a safe assumption.
The Direct Impact on Transport and Fleet Businesses
Let’s be direct about what this means on the ground.
Australian diesel prices surged past $3.00 per litre in March 2026, with wholesale terminal gate prices rising roughly 50% in under two weeks. For a transport operator running a fleet of trucks, that kind of movement doesn’t just affect one cost line. It affects every quote, every contract, every margin calculation across the business.
Fuel costs are embedded in the price of almost everything. When diesel goes up, so does the cost of delivering raw materials, finished goods, food and services. The flow-on inflation is not a one-time event. It works through the economy over months.
Across a fleet of 50 trucks each covering 200,000 kilometres per year, a 10% improvement in fuel efficiency at today’s diesel prices represents annual savings in the hundreds of thousands of dollars.
That number is worth sitting with. A 10% efficiency improvement. Not a fleet replacement. Not a major capital investment. Just a 10% improvement through better management. At current diesel prices, that’s a genuinely significant dollar figure.
For smaller fleets, the proportions are similar even if the absolute numbers are smaller. The principle is the same. Every litre saved matters more now than it did twelve months ago.
Driver Behaviour: Still the Biggest Variable You Can Control
Most fleet managers know that driver behaviour affects fuel consumption. Fewer of them have quantified just how much.
Driver behaviour alone can increase fuel consumption by 15 to 30% at highway speeds.
That’s not a small range. A driver who accelerates hard, brakes late, speeds consistently, and idles excessively can use nearly a third more fuel on the same route than a driver doing none of those things. Across an entire fleet, repeated every day, that difference compounds into a very large number very quickly.
The challenge is that you can’t see driver behaviour without systems that capture it. Telling your team to drive more carefully is fine. Having data that shows exactly who is doing what, on which routes, at what times, is far more powerful. It enables targeted coaching rather than general reminders, and it creates accountability in a way that general instructions don’t.
Maintenance: The Fuel Cost Nobody Talks About
Poor vehicle maintenance is a hidden fuel cost that most businesses underestimate.
Underinflated tyres create rolling resistance. Clogged air filters reduce engine efficiency. Worn fuel injectors affect combustion. Each of these has a modest effect in isolation. Across a fleet of vehicles, many of which may be running with multiple small maintenance issues simultaneously, the cumulative impact on fuel consumption is real and measurable.
Predictive maintenance addresses hidden fuel drains like underinflated tyres, misaligned axles and clogged filters before they erode efficiency.
Moving from reactive maintenance, fixing things when they break, to scheduled proactive maintenance based on vehicle data is one of the most straightforward ways to reduce fuel costs without changing routes, operations, or staffing.
Where Fuel Management Solutions Come In
Individual measures help. Better driver behaviour. Better maintenance. Route optimisation. But bringing it all together into a fuel management system is where the real transformation happens.
Telematics platforms give fleet managers real-time visibility into fuel usage, enabling data-driven coaching, route optimisation and maintenance scheduling that delivers measurable savings. A telematics platform consolidates vehicle data into a single, actionable dashboard. Fleet managers can monitor fuel consumption patterns, set alerts for inefficient behaviours, benchmark performance across the fleet and track improvement over time.
A proper fuel management system does a few specific things that matter enormously in the current environment.
It tracks every litre dispensed across the fleet and links consumption to specific vehicles, drivers, routes, and activities. When fuel is unaccounted for, you see it immediately rather than three months later when you’re reconciling accounts.
It flags anomalies automatically. A vehicle consuming significantly more than its baseline on a standard route. A fuel card transaction at an unusual time or location. A tank level that dropped overnight with no recorded dispensing events. These things happen in fleets and without systems in place they go undetected for months, sometimes longer.
It provides the data foundation for fuel tax credit claiming, which in the current environment is more valuable than ever. The federal government has reduced fuel excise and paused the heavy vehicle road user charge until 30 June 2026. Fleet operators should consult with their accountant about claiming telematics hardware and subscriptions as a tax-deductible business expense.
The Australian Taxation Office administers the fuel tax credit scheme, which provides a rebate on excise for eligible business fuel use. Accurate vehicle-level fuel tracking is what separates businesses that claim what they’re actually entitled to from those that either underestimate or leave credits unclaimed entirely. With fuel costs elevated, the value of getting this right is proportionally higher. Full guidance is available at ato.gov.au/businesses-and-organisations/income-deductions-and-concessions/incentives-and-concessions/fuel-schemes/fuel-tax-credits-business.
The Environmental Dimension Is Now a Business Dimension Too
This used to feel like a separate conversation from fuel costs. It’s not anymore.
Every litre of diesel saved is approximately 2.7 kilograms of CO2 that is not released into the atmosphere. For fleet operators facing increasing reporting obligations under ESG frameworks and the National Greenhouse and Energy Reporting Scheme, telematics data provides the verifiable, vehicle-level emissions records needed to support compliance and demonstrate progress.
Fuel efficiency work serves both goals simultaneously. Saving fuel reduces costs and reduces emissions. The same data that helps you manage your fuel budget also helps you meet your reporting obligations. For businesses that need to report on emissions, having granular vehicle-level data from a telematics system removes the estimation and guesswork from that process.
What to Do Right Now
The businesses that navigate this well will be the ones that face it directly: updating their cost models, protecting their cash flow, and making decisions from a position of preparation rather than reaction.
A few practical starting points for fleet and transport businesses right now.
If you don’t have telematics across your fleet, that’s the most impactful single change you can make. The visibility it provides into fuel consumption, driver behaviour, and vehicle health is the foundation of everything else. Platforms including Geotab, Samsara, EROAD, and Teletrac Navman all have established operations in Australia.
Review your fuel tax credit position. If you haven’t had a proper assessment of what you’re entitled to claim, do it this week. With elevated fuel costs, the dollar value of any underclaiming is significantly higher than it was before the crisis.
Look at your driver behaviour data if you have it, or start collecting it if you don’t. The 15 to 30% fuel consumption difference between good and poor driving behaviour is a large and recoverable cost at any fuel price, but it’s particularly large right now.
Review any existing contracts that were priced before March 2026. Many transport operators are locked into pricing that doesn’t reflect current fuel costs. Understanding where that exposure sits and having a plan for addressing it in contract renewals is important.
And build a buffer for the second half of the year. The excise cut ends on 30 June. The geopolitical situation is still unresolved. The assumption that fuel costs will continue falling smoothly is not one worth betting the business on.
The ACCC’s fuel monitoring page at accc.gov.au/by-industry/petrol-and-fuel publishes weekly updates on wholesale and retail fuel prices across Australia. Keeping an eye on it gives you better context for what’s happening in the market and helps you make more informed decisions about when and how much to buy.
The fuel situation in Australia has changed. How long it stays changed depends on factors well outside anyone’s control here. What is within your control is how efficiently you use the fuel you’re buying, how well you’re protecting it from waste and misuse, and how accurately you’re claiming the tax entitlements available to you. In a high-price environment, all three of those things matter more than they ever have.
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