Diesel is hitting $3.39 a litre at regional bowsers while the federal government\u2019s three-month fuel relief package \u2014 built around a promised 58.7-cent saving \u2014 leaves terminal gate prices 153.5 cents above where they sat before the US-Iran conflict began. That is according to Forest and Wood Communities Australia Chair Steve Dobbyns, who warned the gap between policy announcements and what operators are actually paying has become unsustainable for forestry, freight and farming businesses with no room left to absorb it.<\/p>\n
\u201cDespite promised savings of 58.7c at the bowser, diesel users are seeing prices surge to highs of $3.39\/l in regional areas,\u201d Dobbyns said.<\/p>\n
Wholesale diesel was sitting at 165.5 cents per litre when the US-Iran conflict began \u2014 a figure that held steady through the first weeks of February before breaking sharply higher as crude supply through the Strait of Hormuz tightened. By late March, Sydney\u2019s terminal gate price had plateaued above 310 cents per litre, reaching 319 cents per litre in the first week of April. The adjusted TGP \u2014 with the Road User Charge stripped out and the fuel excise halved \u2014 sits at 260.3 cents per litre, a full 94.8 cents below the headline rate and still nearly a dollar above where the market sat before conflict broke.<\/p>\n
\u201cEven with the removal of the RUC and halving the fuel excise, the terminal gate prices are still almost a dollar more than before the US-Iran conflict began,\u201d Dobbyns said. \u201cOperators need to find that from somewhere, and they need to find it now, not just claim it back at BAS time. By then, it will be too late.\u201d<\/p>\n
FWCA\u2019s Sydney terminal gate price chart tracks the full arc of the current diesel crisis \u2014 from 165.5 cents per litre at the onset of the US-Iran conflict to 319.0 cents per litre in the first week of April 2026. Even with the Road User Charge stripped out and fuel excise halved, the adjusted TGP (blue line) sits at 260.3 cents per litre \u2014 a 94.8-cent gap from the headline rate, and still nearly a dollar above pre-conflict levels. (Chart: Supplied \/ FWCA)<\/p>\n
The current spike sits in sharp relief against the six-year price history charted by FWCA: pandemic supply disruptions pushed diesel above its pre-2020 baseline through 2021, the Russia-Ukraine War drove the national average beyond 230 cents per litre in mid-2022, and two years of gradual easing \u2014 the period FWCA\u2019s own chart labels \u201cperiod to stabilise fuel prices: 2 years\u201d \u2014 returned prices to the 160-to-180-cent corridor that held through most of 2024 and into early 2025. That corridor is now gone, with the national average diesel price well above the 2022 peak and still rising.<\/p>\n
The BAS timing gap is central to FWCA\u2019s argument \u2014 tax relief recouped months after the cost is incurred offers little to a logging contractor paying diesel invoices weekly, and Dobbyns has pressed this point throughout the crisis. Haulage rates on the Mid North Coast and New England tablelands are already moving as contractors price fuel volatility into their quotes, with machinery operating costs across harvesting and transport climbing in parallel, and parts and servicing costs tracking behind them.<\/p>\n
\u201cThere is a clear disconnect between policy announcements and what\u2019s actually being experienced at the bowser in regional Australia,\u201d Dobbyns said. \u201cBy the time relief filters through, it\u2019s already been absorbed by higher wholesale pricing and flow-on costs across the supply chain.\u201d<\/p>\n
FWCA\u2019s longer-run average terminal gate price chart plots Australian diesel and petrol from January 2020 to April 2026 \u2014 with the current Middle East-driven spike erasing two years of price stabilisation and now pushing well above the post-Ukraine War peak of mid-2022. (Chart: Supplied \/ FWCA)<\/p>\n
It comes after Wood Central reported when prices first broke through $3.39 in regional NSW, the cost pressures bearing down on diesel-reliant industries compound at every stage of the supply chain \u2014 each dollar added to the TGP feeds through to haulage rates, then to mill gate timber prices, and ultimately to the cost of framing on Australian building sites.<\/p>\n
FWCA is pushing the federal government for a response that extends beyond the current three-month excise package, with Dobbyns warning that for regional industries with no capacity to pass costs further up the chain, the situation is becoming unsustainable. \u201cWe need a response that reflects how these industries actually operate \u2014 where fuel is embedded across every part of the supply chain, not just the pump price,\u201d Dobbyns said.<\/p>\n
<\/p>\n
Jason Ross, publisher, is a 15-year professional in building and construction, connecting with more than 400 specifiers. A Gottstein Fellowship recipient, he is passionate about growing the market for wood-based information. Jason is Wood Central’s in-house emcee and is available for corporate host and MC services.<\/p>\n
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