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<\/p>\nAs the fuel crisis evolves, consumers may notice a fuel levy surcharge popping up at some businesses to offset costs associated with surging petrol prices \u2014 but how are these new fees decided and are they legal?<\/p>\n
With the war in the Middle East impacting oil supply, the price of unleaded petrol had risen to as high as $2.50 per litre in parts of New South Wales this week, while the cost of diesel had exceeded $3.15 per litre.<\/p>\n
The price hikes led to surcharges on some everyday goods and services as businesses struggled to absorb the additional costs.<\/p>\n
Sydney Fish Market has introduced a temporary levy of 81 cents for every kilogram of seafood bought at auction as trawlers faced a doubling in costs to keep their boats on the water.<\/p>\n
The market said the levy would be directly passed on to commercial fishers as they do not sell goods directly to the public, but individual retailers determine their own pricing.<\/p>\n
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Sydney Fish Market has introduced a temporary levy on seafood bought at auction. (ABC News: Monish Nand)<\/p>\n
‘Survival mechanism’<\/p>\n
In the hospitality sector, the Australian Restaurant and Cafe Association (ARCA) advised cafes, restaurants and pubs to introduce a fuel levy surcharge of up to 5 per cent “as a transparent survival mechanism” to support small businesses.<\/p>\n
Chief executive Wes Lambert told the ABC the surcharge should be implemented on “a case-by-case basis”, well-communicated to customers and subject to guidelines set by the Australian Competition and Consumer Commission (ACCC).<\/p>\n
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The Australian Restaurant and Cafe Association says the surcharge should be implemented on “a case-by-case basis”. (ABC News: Timothy Ailwood)<\/p>\n
UNSW academic economist Timothy Neal said the shock to the price of oil had led to a phenomenon called cost-push inflation, where businesses raised prices due to higher production costs.<\/p>\n
Dr Neal said smaller companies competing against larger companies would likely not have the ability to absorb higher prices from suppliers.<\/p>\n
“In that case, they’re going to be particularly hurt because they’ll feel pressure not to increase their prices too much,” he said.<\/p>\n
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NSW Premier Chris Minns this week said businesses should hold off implementing surcharges but said “in many cases they won’t have a choice”.<\/p>\n
“Obviously, consumers will vote with their feet if they have to, but I also believe people are doing it tough across the economy,” he said.<\/p>\n
Samantha Cull recently introduced a 5 per cent surcharge on all food and drinks at her Lollipop’s Playland cafe in Western Sydney.<\/p>\n
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Samantha Cull recently introduced a 5 per cent surcharge on all food and drinks at her Lollipop’s Playland cafe in Western Sydney. (Supplied)<\/p>\n
The franchisee owner told the ABC after absorbing increased costs from suppliers for three weeks “it was an honest decision to make”.<\/p>\n
“The cost of food going up, the fuel levies, the drop in business \u2014 it’s just an ongoing domino effect,” she said.<\/p>\n
“It scares me each week to see how many businesses are closing, I just need to get the bills paid, I’m not drawing a wage at the moment.”Communication, transparency key![\"Woman](\"https:\/\/www.newsbeep.com\/au\/wp-content\/uploads\/2026\/04\/be73671a9f8f9512c6ac56b75418e5a1.jpeg\")
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Nitika Garg says businesses risk angering consumers with surcharges. (Supplied: University of New South Wales)<\/p>\n
Nitika Garg, consumer behaviour researcher from UNSW’s Business School, said businesses needed to tread carefully when introducing surcharges to avoid consumer backlash.<\/p>\n
“The biggest thing would be to communicate more clearly to the consumer exactly why you’re doing it,” she said.<\/p>\n
Professor Garg said regulators also had a role to play in scrutinising price increase practices, particularly during a crisis.<\/p>\n
“[It] will put off consumers both emotionally and rationally because families are being squeezed, right now, and with the cost-of-living crisis, this is another cost that they are having to absorb,” she said.<\/p>\n
Is it legal?<\/p>\n
A NSW Fair Trading spokesperson told the ABC while businesses could set their own prices, including charging a fuel surcharge levy, the watchdog was monitoring the practice.<\/p>\n
Under Australian consumer law, the minimum total price must be displayed clearly and prominently if the surcharge is added at the end of a transaction.<\/p>\n
“That is, the price of the item and the surcharge must be combined into a single price that the consumer will be required to pay,” the spokesperson said.<\/p>\n
“In restaurant settings, menus should display a single price for the item, including any additional fee that is said to constitute a fuel surcharge.<\/p>\n
“It should not simply be added to the bill at the end of the meal or noted on the menu that a surcharge will apply.”<\/p>\n
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