A Fair Work Commission order that took effect on 21 April is reshaping how diesel cost increases move through road transport contracts. For independent service station operators, the practical question is whether you sit inside the contractual chain, and what that means for your invoices over the coming weeks.
The order requires companies at the top of road transport contractual chains to reimburse those below them for diesel cost increases since 6 March. The mechanism is a fortnightly review of fuel prices and contract clauses, with rate adjustments flowing down the chain. The order stays in force until average national terminal gate diesel falls below $2.00 per litre.
Who the order applies to
Most independent operators are not primary parties. Primary parties are typically the businesses at the top of the chain, the companies engaging transport for the carriage of goods. If you run your own haulage fleet for fuel deliveries between sites, or if you have direct contract carriage arrangements, you may have primary party obligations under clause 4.1.
The more likely position for a typical independent retailer is sitting further down the chain as a customer of transport services, or as a business that may be asked to provide information so the parties above you can demonstrate they have taken reasonable steps under clause 4.2. Even in that position, you will see the effect of the order in your delivery costs as those above you adjust rates fortnightly to recover the increased cost of diesel.
What you need to do
Map where your business sits. Most operators sit as secondary parties or as customers of transport services, but if you have any direct haulage involvement, the obligations change.
Document diesel cost movements from 6 March forward. Terminal gate, wholesale invoice, or pump price, depending on what you use to calculate your cost recovery. The order does not prescribe a methodology. Rise and fall, benchmarking, or special arrangement are all acceptable. What matters is being able to show your working.
Talk to the businesses immediately above and below you in the chain. The order assumes alignment between parties on the cost recovery method being used. Pass through only works if everyone is operating off comparable assumptions.
Keep notes on what is and isn’t working. The Commission is reviewing the order monthly, and the practical impact on small businesses is exactly the kind of evidence the review process is designed to capture.
The review process
The first formal review of the order has been set for 10:00 on Monday 25 May in Sydney. Operators who want to put evidence forward have until 16:00 on Thursday 21 May to lodge submissions, witness statements, and notices to participate. Submissions go to the Commission at [email protected].
For most independents, a submission is not necessary. The order is operating largely above the retail level. But if your business is being affected in ways that aren’t being captured in the broader industry response (regional supply impacts, contract clauses that don’t fit the pass through model, administrative burden disproportionate to the recovery amount), the review is the moment to put that on the record.
When the order lifts
The order ceases to apply when the weekly average national terminal gate price for diesel, as measured in the weekly diesel price report of the Australian Institute of Petroleum, falls below $2.00 per litre.
Last week’s national average diesel price was 275c per litre, down 33.9c on the previous week. The movement is in the right direction, with international refined diesel prices easing and the federal excise reduction now flowing through. But terminal gate is the relevant figure for the order, and we remain well above the trigger.
The order is structured to ride the diesel price down. As prices ease, the recovery amounts shrink. When terminal gate clears the $2.00 threshold, the order falls away and the industry returns to standard contract terms. That trajectory matters for any operator weighing how much administrative effort to put into compliance: this is a temporary measure, not a permanent shift in how transport contracts work.
Where ServoPro can help
If you want a hand mapping your obligations under the order, reviewing your transport contract clauses, or drafting a submission for the 25 May review, get in touch. The independents who are running their own carriage arrangements, in particular, are the ones most likely to need a closer look at clause 4.1 and clause 4.2 obligations.
The order is technical, the timeline is tight, and the documentation matters. But for most members, this is a watch and document situation rather than a major workflow change. Diesel prices will determine how long it stays in force.