From April 21, 2026, a new Fair Work Commission Fuel Cost Recovery Order is now in force. The order requires rising fuel costs to be passed through road transport supply chains, even where existing contracts say otherwise.
The changes respond to sharp swings in diesel prices caused by global supply disruptions and aims to ensure transport contractors and owner-drivers aren’t forced to wear fuel cost increases that threaten the viability of their businesses. The order is backed by recent amendments to the Fair Work Act.
The order applies broadly across the road freight sector. It affects businesses at the top of the supply chain — including manufacturers, major retailers, construction clients and logistics customers — as well as freight operators, subcontractors, and regulated road transport contractors and employee-like workers. Some small businesses that are not road transport businesses may be exempt from certain downstream obligations, depending on their role in the supply chain.
Under the order, transport rates must be reviewed at least fortnightly (or twice a month) to ensure fuel cost increases since March 6, 2026 are fully recovered. Adjustments may be made through rate changes, fuel levies or increments, or direct reimbursement. Existing rise‑and‑fall clauses can still be used — but only if they genuinely reflect current fuel price movements.
Importantly, parties at the top of the contractual chain must not only adjust their own arrangements but also take “reasonable steps” to ensure fuel cost recovery flows through to contractors further down the chain.
The order is temporary and will end once the national weekly average terminal gate diesel price falls below $2.00 per litre. It will be reviewed after one month, and then every three months after that.
While the order does not directly regulate vehicle manufacturing or equipment supply, it will potentially affect many HVIA members through higher transport costs, freight pricing changes and increased emphasis on contract certainty.
Members are encouraged to review transport-related contracts, engage early with logistics partners and customers, monitor Fair Work Ombudsman guidance, and factor potential fuel cost pass-throughs into business planning.