Fuel Cost Protection reinstated for owner drivers and transport businesses

Many transport operators may be aware that fuel cost recovery obligations under the Fair Work Commission’s Road Transport Contractual Chain Order – Fuel Cost Recovery – 2026 ceased earlier this year when diesel prices fell below the $2 per litre threshold. However, recent increases in diesel prices have prompted the Fair Work Commission (FWC) to move quickly to reinstate those protections.

On 16 October 2026, an FWC Expert Panel proposed varying the fuel cost recovery order to once again require parties at the top of road transport contractual chains to review fuel costs and ensure owner drivers and transport businesses can recover increased fuel expenses. The proposal follows sustained increases in diesel prices linked to ongoing uncertainty in the Middle East.

Members should consider the following questions:

• Does your business engage owner drivers or transport businesses to perform transport services?
• Are you a principal contractor, consignor, consignee, freight broker, or another party at the top of a road transport contractual chain?
• Does your business have contractual mechanisms in place to account for significant fuel price fluctuations?
• Have you reviewed whether your current transport agreements would be impacted if the fuel cost recovery obligations are reinstated?

The current framework is established under the Road Transport Contractual Chain Order – Fuel Cost Recovery – 2026 and administered by the Fair Work Commission, with compliance information available through the Fair Work Ombudsman.

When the original order commenced in April 2026, businesses at the primary and secondary levels of a road transport contractual chain were required to adjust rates at least fortnightly, or twice per month, to ensure increased fuel costs were appropriately recovered throughout the supply chain. Existing rise-and-fall clauses, fuel levies, reimbursements, or similar pricing mechanisms could be used to satisfy these obligations.

The fuel cost recovery obligations ceased in June 2026 after the national diesel price fell below the prescribed $2 per litre threshold. However, with diesel prices having risen significantly in recent months, the FWC Expert Panel, comprising Vice Presidents Ingrid Asbury and Mark Gibian and Commissioner Scott Connolly, has proposed reviving the order. Interested parties have been invited to provide submissions on the proposed variation by 23 October 2026. MBA is preparing a submission on the proposed variation and encourages members to provide comments or feedback as soon as practicable.

Businesses involved in road transport supply chains should monitor developments closely, as the proposed variation may result in renewed obligations to review fuel costs and adjust transport rates.

Members seeking assistance should contact the Advisory Team or consult the FWC major case webpage for updates on the proposed variation and any resulting obligations.