Fuel Costs and the RTCCO: What Businesses Need to Know
Australia's temporary fuel excise relief ended in August, with the temporary 16 cents per litre reduction applying until 2 August 2026.
For businesses reliant on road freight, changes in diesel prices can quickly flow through to transport costs.
But does the end of the fuel excise relief automatically mean businesses have new fuel cost recovery obligations under the Road Transport Contractual Chain Order – Fuel Cost Recovery – 2026 (RTCCO)?
Not necessarily.
Understanding how the Order operates, and its current status, is important for businesses throughout road transport contractual chains.
What is the RTCCO?
The RTCCO commenced on 21 April 2026 following significant increases in fuel prices associated with disruption to global fuel supply.
The Order was designed to ensure increased fuel costs could be recovered through road transport contractual chains, rather than being absorbed by transport operators and regulated road transport workers.
When its fuel cost recovery obligations were operating, certain parties were required to adjust rates each fortnight, or twice per calendar month, by the amount necessary to enable recovery of increased fuel costs.
Adjustments could be made through mechanisms including changes to rates, fuel levies, direct reimbursement or existing contractual rise-and-fall arrangements that met the requirements of the Order.
Where does the $2 diesel price come in?
Importantly, the RTCCO is linked to the wholesale price of diesel, rather than the price motorists see at the service station.
The Order provides that its fuel cost recovery obligations cease when the weekly average national terminal gate price for diesel, measured using the Australian Institute of Petroleum's Weekly Diesel Prices Report, falls below $2.00 per litre.
That distinction is important.
Changes at the bowser, or changes to fuel excise, don't in themselves determine whether the RTCCO's fuel cost recovery provisions are operating.
What is the position now?
In July, the Fair Work Commission confirmed that the relevant wholesale diesel price had fallen and the fuel cost recovery obligations in clause 4 of the Order had ceased to apply.
However, the RTCCO itself has not been revoked and remains current. The Commission is continuing to review the Order, with the matter currently scheduled for further hearing in October.
This means businesses shouldn't assume the RTCCO is simply a thing of the past.
Why does this matter to growers?
You don't necessarily need to think of yourself as being “in the transport industry” for road transport contractual arrangements to be relevant to your business.
Growers and other agricultural businesses routinely rely on road freight to move produce and other goods through the supply chain.
That makes it worthwhile understanding your transport arrangements and, in particular, who bears the risk when fuel costs move significantly?
Now is a useful time to review:
how your transport contracts deal with changing fuel costs;
whether you have fuel levies or rise-and-fall mechanisms in place;
how and when those mechanisms are reviewed;
which parties within your transport arrangements may be affected by the RTCCO; and
who is responsible for monitoring and responding to changes.
Don't wait for fuel prices to rise
The return of the full fuel excise doesn't, by itself, reactivate the RTCCO's fuel cost recovery obligations. But it does provide a useful reminder that fuel prices can change quickly, and businesses are better placed when their contractual arrangements already contemplate how those changes will be managed.
For growers and other businesses heavily reliant on road freight, understanding your transport contracts before costs escalate can help avoid uncertainty and disputes when conditions change.
If you're unsure how the RTCCO applies to your business or whether your existing contractual arrangements are adequate, speak with the Focus HR team. Reach out via the QFVG workplace relations support line at wrteam@qfvgcom.au or 07 3620 3844.
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