This is an update regarding the Road Transport Contractual Chain Order – Fuel Cost Recovery – 2026 (Order) which was made by the Fair Work Commission (FWC) and commenced on 21 April 2026. The Order was introduced in response to fuel supply disruptions caused by the significant reduction in shipping through the Strait of Hormuz and the ongoing conflict in the Middle East.
1. Context
The Order covers primary and secondary parties, road transport businesses, digital platform operators, regulated road transport contractors and employee-like workers in a road transport contractual chain.
Under the Order, primary and secondary parties must adjust rates at least fortnightly or twice per calendar month to ensure the recovery of increased fuel costs, relative to prices as at 6 March 2026. They must also take reasonable steps to ensure those increases are passed through the contractual chain so that downstream transport providers also recover the higher fuel costs.
The Order provides that it remains in force unless the weekly average national terminal gate price for diesel (as reported by the Australian Institute of Petroleum) falls below $2.00 per litre.
Non-compliance with the Order constitutes a contravention of a civil remedy provision under the FW Act and may expose businesses and individuals to significant civil penalties.
2. Where things stand: Dormant since June 2026
Following an engagement conference on 1 May 2026 and a first review hearing on 25 May 2026, the Expert Panel published a statement and notice of intent to vary the Order on 29 May 2026.
However, that process was overtaken by events. Diesel prices fell below the Order's $2.00 per litre threshold in the week ending 5 June 2026, automatically switching off the rate-adjustment obligations in clause 4 of the Order. In a further statement on 19 June 2026, the Expert Panel confirmed those obligations had ceased to apply, while the Order itself remained in force.
On 7 July 2026, the Expert Panel declined to either revive the obligations early or revoke the Order, noting it could not be satisfied, with a high level of confidence, that the emergency circumstances underlying the Order had definitively passed. The matter was listed for a further report-back and case management hearing on 26 August 2026, coinciding with the review required every three months under clause 5.4 of the Order.
3. 26 August 2026: Diesel prices rise again
At the report-back and case management hearing on 26 August 2026, the Expert Panel observed that, based on publicly available information, the circumstances which resulted in the Order originally being made do not appear to have definitively passed. The Expert Panel also observe the fuel supply chain continues to be affected by conflict in the Middle East and the reduction in shipping through the Strait of Hormuz.
Significantly, the Australian Institute of Petroleum reported the weekly national average terminal gate price for diesel at 239.7 cents per litre for the week ending 21 August 2026 – back above the Order's $2.00 per litre threshold – with the average for the preceding four-week period at 234.4 cents per litre.
The FWC has noted that at the hearing, the Transport Workers' Union and the Australian Trucking Association indicated they intend to submit that the Order should be varied to re-enliven the clause 4 obligations given the current circumstances. Some interested parties indicated they intend to, or may, submit that the Order should instead be revoked entirely, while others reserved their position pending further evidence.
4. Directions for submissions and evidence
The Expert Panel has directed interested parties to file submissions and evidence addressing whether the clause 4 obligations should be re-enlivened, the clause 5.4 review of the Order, and whether the Order should be revoked. The Expert Panel indicated it would be assisted by evidence on the operation of the Order between April and June 2026.
The Expert Panel has made the following directions:
- any interested party proposing that the Order be re-enlivened, revoked, or that any other step be taken must file a short statement identifying the step sought and the grounds for it, by 4:00 pm AEST on Monday, 31 August 2026;
- any interested party is to lodge written submissions and any evidentiary material addressing whether the Order should be re-enlivened or revoked, or any other step or matter it wishes the Expert Panel to consider, by 4:00 pm AEST on Monday, 14 September 2026; and
- any interested party is to lodge submissions and evidentiary material in reply by 4:00 pm AEST on Wednesday, 23 September 2026.
The matter has been listed for a further hearing on Monday, 28 September 2026, to hear evidence and oral submissions.
Businesses should treat the Order's obligations as likely to be reactivated and should not rely on the current dormancy continuing.
5. Your next steps
- Continue live monitoring of the weekly AIP national average terminal gate diesel price, noting it has now been reported above the $2.00 per litre threshold for several consecutive weeks.
- Consider whether your organisation wishes to make submissions to the Expert Panel on whether the Order should be re-enlivened, revoked, or otherwise varied, noting the 31 August, 14 September and 23 September 2026 deadlines ahead of the 28 September 2026 hearing.
- Maintain good record keeping of fuel costs and related communications across the contractual chain, so that evidence is readily available if the Order's obligations are re-enlivened or the Expert Panel calls for it.
- For new contracts, plan that the current fuel price volatility continues, rather than assuming a prompt return to stable conditions.
We will continue to monitor developments of the Order and provide further updates as they arise.
If you have any questions about the implications of the Order for your organisation or require assistance preparing a submission to the Expert Panel, please contact our team for tailored advice and support.
