Three weeks ago, wholesale diesel was sitting at 161.4 cents per litre. It is now 263 cents at Sydney terminals. That is a climb of more than 100 cents per litre since conflict broke out in the Middle East on 28 February — the fastest and steepest wholesale fuel rise in Australian history.
And the Australian Competition and Consumer Commission is not satisfied with how retailers have handled it. The ACCC has hauled fuel suppliers and retailers in to explain why pump prices rose almost immediately after the conflict began. Standard practice allows a seven-to-ten-day lag — retailers sell through cheaper existing stock before passing on higher wholesale costs.
This time, however, prices moved the same day.
Regional Australia faced high prices before questions were raised in Canberra.
Yesterday, Wood Central exclusively revealed that Armidale was already at 339.0 cents per litre. Macleay Island in Queensland, at 351.0 cents, and Longreach, Coober Pedy, and Mount Isa are all sitting above 210 cents. Meanwhile, Metro Sydney sits at 288.5 cents and Melbourne, at 291.0 cents.
The gap between Armidale and Sydney — roughly 63 cents at the bowser against a standard pre-war retail margin of 24 cents — is the number that Forest and Wood Communities Australia Executive Chair Steve Dobbyns put to Wood Central on Monday, whilst warning the supply chain cannot absorb the difference.
“With 90 per cent of our population living on just 0.25 per cent of Australia’s land mass, regional communities are feeling the impact of surging fuel prices more acutely than their city cousins. The cost of fuel is up to a dollar higher in regional communities, and they can’t just walk to the shops or catch a train.”
It comes as Wood Central reported that the hardwood families moving structural timber to building sites, mine shafts and vineyards — and the operators loading the hardwood pallets that carry food from farm gate to city shelf — are already being squeezed at $3.39 a litre in some communities.
And groceries are next.
Wood Central understands that Road Freight NSW told operators to expect supermarket price hikes from next month. Transport costs now represent 50 to 60 per cent of total freight operating expenses — and companies that absorbed the first wave of increases are running out of runway.
Staple goods are the most exposed: milk, bread, fresh produce, and meat. A separate pressure is building in fertiliser markets, with Middle Eastern producers supplying roughly 45 per cent of global supply now disrupted — pushing input costs for cereal crops into the winter planting season.
And whilst the ACCC is focused on the bowser, the damage upstream is already visible. One in twelve transport businesses shut down over the past year, and since 28 February, payment defaults among freight companies have doubled.
It’s about to get a lot worse…
NAB has already flagged headline inflation peaking above five per cent in the second quarter of 2026 if current fuel prices hold. The Reserve Bank has a rate rise to 4.1 per cent on the table. For the average non-EV household, fuel alone adds an estimated $78 per month. Add a mortgage increase, and that figure climbs to nearly $190.
The federal government has confirmed it is preparing to release 800 million litres of emergency diesel and petrol reserves — holdings stored in Geelong and Brisbane, bolstered since 2023. At the same time, the ACCC is expanding its weekly price monitoring from eight capital cities to 190 regional locations.
That expansion is an admission. The crisis is not a problem for the capital cities; it hits hardest in the regions.
Please note: This article is part of Wood Central’s ongoing special series on the impact of rising fuel prices on regional and rural supply chains for timber and paper-based products. It comes as Wood Central reported that the Dorney family’s fifth-generation hardwood operation on the Mid North Coast faced a $7,800 weekly fuel surge in $2.90 a Litre: The Regional Fuel Crisis Starving Australian Cities of Wood, and that Forest and Wood Communities Australia warned the pallet supply chain feeding Aussie cities is under threat in Diesel Hits $3.39 — Pallet Crisis Could Starve Aussie Cities of Food.
