Before late February 2026, diesel averaged around $1.74 per litre. By mid-March it had crossed $3 in many regions. That is a jump of more than 70% in under four weeks, triggered by the closure of the Strait of Hormuz, the chokepoint that carries roughly 20% of the world’s daily oil supply.
Australia imports approximately 90% of its refined fuel. As of mid-April 2026, Energy Minister Chris Bowen confirmed the country holds just 29 to 31 days of diesel reserves, roughly one-third of the IEA’s recommended 90-day buffer. Even with a ceasefire announced on 8 April, supply chain experts say normalisation will take months. For civil contractors, this is a direct hit to project margins. Here is what the numbers actually look like and what to do about it.
What It Is Costing a Civil Operation Right Now
Civil construction is one of Australia’s most diesel-intensive industries. Every excavator, grader, dump truck, and generator runs on it. At these prices, the impact is immediate.
Using a mid-size operation as a reference: 10 machines averaging 30L/hour, running 8 hours a day, 5 days a week — that is 12,000 litres per week.
- At $1.74/L (pre-crisis): $20,880/week
- At $3.00/L (crisis peak): $36,000/week
- At $2.68/L (post excise cut estimate): $32,160/week
That is $11,280 extra per week even after government relief. Over a 12-month project, that is roughly $587,000 in additional fuel cost compared to pre-crisis pricing.
“The Housing Industry Association has separately warned that sustained fuel price increases could add $8,000 to $15,000 to the cost of a single new home. On a civil project running 15 machines over two years, the multiplier is far higher.”
The Excise Cut: What It Does and Does Not Fix
From 1 April to 30 June 2026, the federal government halved fuel excise from 52.6 cents to 20.6 cents per litre, a 32 cent saving at the pump (ATO, April 2026). That is real relief. But it does not fix a $3 diesel problem.
There is a specific catch for civil operators. Fuel tax credits (FTC) are calculated on the excise duty payable. Halving the excise halves the FTC rate for off-road diesel, the category covering excavators, compactors, and site generators. From 1 April, both on-road and off-road FTC rates converge at 26.3 cents per litre. If you are not tracking fuel accurately by equipment type and use category, you will either under-claim or miscalculate your BAS entirely.
The excise cut also expires 30 June. Price any project running beyond that date on $3 diesel, not the current post-cut rate. Use the Fuellox Fuel Excise Calculator to check what you are entitled to claim right now.
Unmonitored Fuel Is Now a Much Bigger Problem
When diesel cost $1.74 a litre, a 200-litre weekly loss from unauthorised dispensing or leakage cost $348. At $3 per litre, that same loss costs $600 per week, over $31,000 annually, from a single unmonitored tank.
WA Police Commissioner Col Blanch warned on ABC Radio in March 2026 that fuel theft was already rising, with unattended on-site tanks singled out as high-risk targets. On most civil sites, access control is still a padlock and a shared key. At $3 a litre, fuel theft prevention is no longer just a security measure. It is a cost control measure.
What to Do Right Now
This week
- Review active contracts for cost-escalation clauses. NSW and most eastern states allow these for conflict-related price spikes.
- Reprice projects extending past June using $3 diesel as your base, not the post-cut rate.
- Update your FTC claims using April 2026 ATO rates. Do not apply pre-April rates to fuel acquired after 1 April.
- Lock down site tanks physically. A shared padlock key is not access control.
This month
- Install dispensing control. The Fuellox fuel management system logs every dispensing event: who, when, how much, which asset, GPS location. At $3 a litre, every unlogged litre is a measurable loss, not a rounding error.
- Get per-machine consumption data. The Fuellox Dashboard shows real-time fuel activity across every tank and every site. Inefficiency that was invisible at $1.74 is now costing you double.
- Protect remote tanks physically. The Kockon Anti Syphon Range closes the physical vulnerability on unattended tanks. Combined with dispensing control, it covers both the opportunistic theft and the operational leak.
Wrapping Up
Diesel is up more than 70%. Reserves sit at 29 to 31 days. The excise cut expires 30 June. The crisis has not created new problems for civil contractors. It has made existing ones significantly more expensive. The only variable you can control is how much of your diesel spend is visible, authorised, and attributed to the right asset and job.
Want to see exactly what your operation is losing right now?
Explore the Fuellox fuel management system or book a 10-minute call with our team.
We’ll show you what’s possible.
