Road Transport Fees Set to Rise
Oil prices continue to rise, with a recent significant hike due to conflict over the Hormuz Strait passage and Australia's limited fuel reserves. As a result, higher petrol prices at the bowser aren’t the only concern, as the increasing cost of transport impacts everything from groceries to clothing, furniture and everyday household goods.
The Fuel Excise Relief is Coming to an End
In April 2026, the Federal Government introduced temporary Fuel Excise relief reducing the excise from 52.4c/L to 26.3c/L. The measure, initially scheduled to run for three months, was later extended until the end of July, with the full excise reinstated on August 3, 2026.
The Cost of Fertiliser Is Rising
On top of the fuel excise relief measure ending, fertiliser costs are rising beyond previous patterns. This is being driven by global exchange, freight costs, global demand, and more immediately, the conflict in the Strait of Hormuz. As a significant portion of the world’s urea trade passes through the Strait, disruptions have tightened global supply and contributed to fertiliser prices increasing by 53.7% between February and March. Although the Australian Government has secured 90,000 tonnes of Urea, will this be enough for a summer crop in 2026-27?
Strong El Niño and Drought Risk
Finally, with a very strong El Niño and drought risk expected this summer, with high fire risk and water shortages, farmers are being stretched beyond their limits.
Transport Cost are Rising
Farmers are also facing rising transport costs. Transporting stock, grain, farming equipment, and the need to cart water due to El Niño and drought risk, are set to create a crippling financial storm that will impact food affordability.
"As a freight company serving Australia's regions, farming, manufacturing and mining are all looking at major cost increases in the coming year. We are already seeing our many farming equipment clients struggling, with oversized transport on items like water tanks, shipping containers and machinery becoming unaffordable. We're working with our farming clients to deliver over-dimensional items as cheaply and efficiently as possible," said Robin Moore, of interstate freight company, All Vehicle Freight
The Australian Government Needs to Act Now
The Australian Government will need to work closely with regional communities to help address the rising costs facing farmers. Many are already bracing for the impact now, with concerns that higher production cost could ultimately lead to increased food prices for Australians, many of whom are already struggling with the cost of living.
