The Diesel Crisis Is Crushing Australian Businesses. Here Are Your Finance Options Right Now.

Diesel is above $3.10 per litre in Australian capital cities. In remote communities across the Northern Territory, Western Australia and Far North Queensland, it has cracked $3.80. Over 550 service stations nationwide have run out of at least one type of fuel. Construction employers have warned of "mass layoffs" and thousands of potential insolvencies. Logistics operators are adding 8% to 10% fuel surcharges to every contract. Farmers are sounding the alarm that the timing could not be worse, with critical sowing seasons now at risk because the diesel needed to run tractors, harvesters and grain trucks is either unavailable or unaffordable.

This is not a petrol story. Petrol has stabilised somewhat since the government halved the fuel excise on 1 April, sitting around $2.35 to $2.45 per litre in most capital cities. The real crisis is diesel. Australia consumed around 35 billion litres of diesel in 2025, more than double the 15 billion litres of petrol. Only about a quarter of that diesel goes to private motorists. The rest powers trucking (24%), mining (24%), agriculture (8%), manufacturing (7%) and the construction, freight and logistics operations that keep the economy moving. When diesel prices spike, the cost hits every supply chain in the country, and it hits the businesses that run on diesel hardest of all.

If you run a business that depends on diesel, whether you are a tradie with a work ute, a fleet operator with 20 trucks, a farmer running heavy machinery, or a construction company managing site vehicles and earthmoving plant, the question you are facing right now is not whether the crisis will affect you. It already has. The question is what you can do about it.

At Australian Finance & Loans, we work with a panel of over 50 lenders to help Australian businesses access the right finance for their situation. This article is not a prediction about when diesel prices will come down. Nobody knows that with certainty. What it is, is a practical guide to the finance options available to you right now to manage the impact, reduce your exposure, and position your business to come out the other side.

What Is Actually Happening With Diesel

Australia's diesel reserves sit at approximately 29 days of supply as of mid-April 2026, well below the International Energy Agency's recommended 90-day minimum. We have not met that target since 2012. The country imports roughly 90% of its refined fuel, and its two remaining domestic refineries, Ampol's Lytton in Brisbane and Viva Energy's Geelong in Victoria, meet less than 20% of national demand.

The supply disruption was triggered by the closure of the Strait of Hormuz following the US-Israel military strikes on Iran in late February 2026. Approximately 20% of the world's seaborne oil supply passes through the strait. While Australia imports relatively little crude directly from the Middle East, the Asian refineries in Singapore, South Korea and Malaysia that produce the majority of Australia's refined diesel depend on Middle Eastern crude. When those refineries lost access to their feedstock, the flow-on to Australian supply was immediate.

Energy Minister Chris Bowen has confirmed that 53 ships carrying 3.7 billion litres of fuel are en route and expected in April, and has signed supply agreements with Singapore. A fragile ceasefire in the region has eased some pressure on global crude prices, with Brent crude dropping from its peak above US$120 per barrel toward the mid-US$90s. But analysts from Rystad Energy and others have warned that it will take weeks, potentially into mid-May or later, for lower international prices to filter through to Australian bowsers because of long supply chains and existing high-cost contracts.

The Commonwealth Bank has estimated that a 10% increase in diesel, petrol and jet fuel prices could lift costs by 1% to 1.5% across transport, mining and agriculture. A 10% reduction in fuel availability could cost the mining sector approximately $14 billion and construction approximately $13 billion. These are not hypothetical numbers. This is the economic reality businesses are navigating right now.

Option 1: Working Capital to Cover the Cost Surge

The most immediate impact of the diesel crisis on most businesses is cash flow. Your fuel bill has jumped 30% to 50% or more in the space of a few weeks, but your revenue has not moved by the same amount. You are paying more for fuel, more for freight, more for materials that are transported by diesel-powered trucks, and your customers have not yet accepted the price increases you need to pass on.

An unsecured business loan or business line of credit can bridge this gap. Non-bank lenders on our panel can approve working capital loans of $10,000 to $300,000 within 24 to 48 hours, assessed on your business bank statements rather than full financial accounts. This is not long-term debt. It is short-term cash flow support to get you through a period where your costs have moved faster than your revenue. Rates range from approximately 12% to 25% per annum depending on your business profile, but for a business facing the choice between missing a supplier payment or paying a higher interest rate for 6 to 12 months, the maths often works.

For businesses with outstanding invoices from customers who are slow to pay, invoice finance can unlock up to 80% to 85% of the value of those invoices within 24 hours, rather than waiting 30 to 90 days. If your cash flow problem is not a revenue problem but a timing problem, invoice finance may be the most cost-effective solution.

Option 2: Switching to a More Fuel-Efficient Fleet

The businesses that are least affected by the diesel crisis are the ones that reduced their diesel dependency before it started. And while you cannot undo the past, you can start making the transition now.

Electric Utes

The Toyota HiLux BEV arrives in Australian showrooms in Q2 2026 from $74,990 before on-road costs. It is the first all-electric ute from a mainstream manufacturer in Australia. The KGM Musso EV and LDV eT60 are already on sale. For employees whose employer offers salary packaging, an eligible battery electric ute financed through a novated lease is 100% FBT exempt under the Electric Car Discount, which can deliver annual savings of $8,000 to $12,000 or more. For business owners, a chattel mortgage on an electric ute gives you ownership from day one with full GST, depreciation and interest deductions. See our ute loans page for the full range of options.

Plug-In Hybrid Utes

The BYD Shark 6 has sold over 18,000 units in its first year. The Ford Ranger PHEV is available from $71,990. Both offer significantly lower fuel costs than diesel equivalents for drivers who charge regularly. Note that PHEVs no longer qualify for the FBT exemption on new novated leases entered after 1 April 2025, but they can still be financed through a chattel mortgage or standard car loan with substantial running cost savings compared to diesel.

Electric and Hybrid Cars and Vans

If your business runs cars and vans rather than utes, the EV options are even broader. Tesla Model Y, BYD Atto 3, Hyundai Ioniq 5, Kia EV6, MG4 and dozens of other models are available below the $91,387 FBT threshold. For a full breakdown, see our EV loans page and our EV finance guide.

Option 3: Refinancing Existing Vehicle and Equipment Loans

If your business took out vehicle or equipment finance when rates were higher, or before your trading history had matured, there may be an opportunity to refinance at a lower rate and reduce your monthly outgoings. A 2% reduction on a $100,000 loan saves approximately $5,400 over a 5-year term. That is money back in your cash flow during a period when every dollar counts.

We assess your existing loan, your current business profile and the available market rates to confirm whether refinancing delivers a genuine saving after any early exit fees on the existing facility. If it does not save you money, we will tell you. If it does, we manage the process from application to settlement.

Option 4: Financing Fuel-Efficient Equipment

The diesel crisis does not only affect vehicles. It affects every piece of diesel-powered equipment your business operates: generators, compressors, pumps, earthmoving plant and material handling equipment. Newer models are significantly more fuel-efficient than older ones. A 10-year-old excavator may consume 30% to 40% more diesel per operating hour than a current model. At $3.10 per litre, that difference adds up fast.

If you have been deferring an equipment upgrade, the fuel crisis may have changed the economics of that decision. Our panel of 50+ lenders includes specialist heavy machinery and construction equipment lenders who understand asset valuations, depreciation profiles and the operating cost case for newer, more efficient plant. Chattel mortgage is the standard structure, and if the equipment costs less than $20,000 (excluding GST) and your business has turnover under $10 million, the instant asset write-off may apply for purchases settled before 30 June 2026.

For larger equipment purchases, see our pages on manufacturing loans, farming and agriculture loans, and engineering loans.

Option 5: Fleet Restructuring

If your business operates a fleet of diesel vehicles, the current environment is a catalyst to review your fleet strategy. The options include transitioning some or all vehicles to electric or hybrid models over the next 12 to 24 months, refinancing existing fleet vehicles to lower rates, restructuring from owned vehicles (chattel mortgages) to leased vehicles (finance leases) that allow easier rotation as more fuel-efficient models become available, and consolidating multiple vehicle loans into a single master fleet finance facility for simpler administration and potentially better rates.

Fleet decisions made now will determine your fuel cost exposure for the next 3 to 5 years. We can model the total cost of ownership for your current fleet against the cost of transitioning to more efficient vehicles and help you structure the finance to make the transition cash-flow positive from day one.

The Government Response: What Has Actually Changed

The federal government has implemented several measures since the crisis began. The fuel excise has been temporarily halved from 52.6 cents to 26.3 cents per litre, effective from 1 April 2026 for three months, with a further cut funded by GST revenue bringing the total reduction to approximately 32 cents per litre. The government has released 762 million litres from emergency fuel reserves. Fuel quality standards have been lowered for 60 days to allow higher-sulphur fuel into the domestic market. Supply agreements have been signed with Singapore. Heavy vehicle road user charges have been temporarily suspended for three months. And the government has underwritten fuel purchases by Ampol and Viva Energy to keep their refineries operating.

For businesses, the most tangible impact is the excise cut, which has reduced petrol prices by approximately 12 to 25 cents per litre depending on the city. Diesel has been less responsive because the supply constraint is more severe and wholesale diesel prices have continued to rise independently of the excise change. The ACCC has issued letters to major fuel companies warning them to pass on the full excise reduction and is investigating fuel surcharges that may exceed genuine cost increases.

The government has also announced $1 billion in interest-free loans for freight, fuel and fertiliser businesses through the National Reconstruction Fund, though full details of eligibility and application processes have not yet been released.

What This Means for Your Business Finance Decisions

The diesel crisis is a cash flow event, not a demand event. Your customers still want your products and services. The problem is that your cost base has moved sharply higher and your margins are being squeezed. The businesses that navigate this best will be the ones that act early to protect their cash flow, reduce their diesel exposure where possible, and use finance strategically to bridge the gap between where costs are now and where they will settle once supply normalises.

None of us know exactly when that normalisation will happen. Analysts suggest weeks to months for meaningful price relief, and potentially up to a year for a full return to pre-crisis levels. What we do know is that every finance decision you make today should be stress-tested against the possibility that elevated diesel costs are not temporary. If prices stay high for 6 to 12 months, does your business have the cash flow to absorb it? If not, the time to act is now, not when the cash runs out.

Need Help Navigating the Diesel Crisis?

Whether you need working capital to cover the cost surge, finance to transition to more fuel-efficient vehicles or equipment, or advice on restructuring your fleet, the team at Australian Finance & Loans can help you compare options across 50+ lenders and find the right solution for your situation.

We are an independent brokerage. We do not sell our own products. We compare the market and work for you.

Book a Free Call  |  Call 1300 194 926  |  Email info@australianfinanceloans.com

Frequently Asked Questions

How long will the diesel crisis last?

Nobody knows with certainty. A fragile ceasefire in the Middle East has eased some pressure on global crude prices, but analysts from Rystad Energy and others have warned that it will take weeks, potentially into mid-May or later, for lower international prices to filter through to Australian bowsers. Full normalisation to pre-crisis price levels could take months or up to a year as global supply chains readjust. The prudent approach is to plan for elevated diesel costs lasting at least 6 to 12 months.

Can I get a business loan to cover increased fuel costs?

Yes. Unsecured business loans of $10,000 to $300,000 are available through non-bank lenders on our panel, assessed on your business bank statements and approved within 24 to 48 hours. Business lines of credit are also available for ongoing cash flow support. These are short-term solutions to bridge the gap between your current costs and your revenue.

Should I switch to an electric ute now?

The financial case for electric utes is stronger than it has ever been. The Toyota HiLux BEV arrives in Q2 2026 from $74,990. For employees with salary packaging, an eligible electric ute through a novated lease is FBT exempt. For business owners, a chattel mortgage on an electric ute gives you ownership and tax deductions from day one. The running cost savings at current diesel prices make the payback period on the switch shorter than ever. See our ute loans page for all options.

Can I refinance my existing vehicle or equipment loans?

Yes. If your current loans were taken out at higher rates or before your business profile improved, refinancing to a lower rate can free up cash flow during the crisis. We assess your existing loans, your current financial position and available market rates to confirm whether refinancing delivers a genuine saving. If it does not, we will tell you.

Is the government offering any financial support for businesses?

The government has announced $1 billion in interest-free loans for freight, fuel and fertiliser businesses through the National Reconstruction Fund, though full details have not yet been released. The fuel excise has been halved for three months from 1 April. Heavy vehicle road user charges have been temporarily suspended. Several state governments have introduced free or subsidised public transport. Check with your industry association and the business.gov.au website for the latest updates on available support.

How can I reduce my business's diesel exposure?

The main strategies are transitioning to electric or hybrid vehicles where operationally viable, upgrading older diesel equipment to newer, more fuel-efficient models, renegotiating supply contracts to include fuel surcharge pass-through clauses, using invoice finance to improve cash flow timing, and accessing working capital through a business loan to bridge the cost gap while prices remain elevated.

Is this a good time to buy equipment?

If your existing equipment is old and fuel-inefficient, the diesel crisis may have changed the economics of replacement. A newer model that consumes 30% to 40% less diesel per hour saves thousands of dollars per year at current prices. Combined with the $20,000 instant asset write-off (available through a chattel mortgage for purchases settled before 30 June 2026), the first-year cost of upgrading may be significantly lower than you expect. We can model the total cost including finance, fuel savings and tax benefits for your specific equipment.