Fortnightly ALC Government Relations Update No.7 17 April to 1 May 2026

ALC’s Dr Hermione Parsons appeared before the Senate Select Committee on Productivity and focused on a practical question the Committee kept coming back to: what happens to Australia’s supply chain and logistics industry if we move to Stage 4 rationing of diesel fuel? 

When asked about higher stages of diesel rationing, Dr Parsons focused on what happens in practice. Her evidence was that fuel prioritisation frameworks only work if the freight transport and freight logistics network can move fuel under those settings. Decisions made at a national level do not deliver outcomes unless there is capacity to distribute fuel through road, freight rail and terminal networks. 

She drew directly on the ALC’s Diesel Fuel Prioritisation paper, positioning freight transport and freight logistics as the enabler within any fuel prioritisation framework. That point was acknowledged by Senator Bridget McKenzie during the hearing, with the Committee recognising that prioritisation cannot be carried out without the freight network. 

Hermione Parsons’ examples were based on our industry’s operational realities -even where fuel is allocated to priority sectors such as health, food or emergency services, those sectors rely on the freight transport and logistics network to receive it. Constraints in tanker availability, driver capacity, terminal access or corridor movement will interrupt supply at the point of delivery. 

Freight rail was raised as an immediate opportunity. Rail already carries a significant share of the national freight task yet remains underutilised on key inter- and intrastate corridors where it could reduce pressure on road-based fuel distribution. The constraint is not capability but policy settings, including access, pricing, and first- and last-mile connections. 

The discussion also linked these issues to productivity more broadly. The evidence was that Australia’s productivity challenge lies in the lack of integration across the freight system. Land-use decisions, corridor access, infrastructure investment, and regulation are not aligned, reducing efficiency and limiting the system’s ability to respond to disruptions. 

Workforce constraints were also highlighted. With around 28,000 driver vacancies and an ageing workforce, the system lacks the depth to absorb shocks. This directly affects the ability to move fuel and freight, particularly into regional areas. 

The Australian Logistics Council appeared before the House of Representatives Standing Committee on Regional Development, Infrastructure and Transport today as part of the Inquiry into Local Government Funding and Fiscal Sustainability.

A central point from our evidence is that roads should be treated as core economic infrastructure, not merely a local government responsibility.

Local governments manage the majority of Australia’s road network. This includes the first- and last-mile connections that link freight to ports, intermodal terminals, and airport freight hubs. These links are critical to how the national supply chain functions day to day. When they are under strain, it affects cost, reliability, and capacity across the system.

In regional Australia, the challenge is more complex. Many councils are also responsible for regional airports, with more than 60% operating at a loss. That places two critical pieces of freight-enabling infrastructure, landside access, and aviation connectivity, on the same balance sheet. Both are essential to maintaining service levels, particularly for time-sensitive and high-value freight such as pharmaceuticals, medical equipment and perishable goods moving into and out of regional and remote communities. Demand is increasing. Freight volumes and axle loads are rising, and extreme weather is accelerating asset wear. At the same time, the funding base is shifting. As vehicle efficiency improves, fuel excise-linked revenue is expected to weaken over time.

This creates a structural gap between the freight task and the infrastructure that supports it. In regional Australia, that gap is already visible in reduced reliability, constrained access, and growing resilience risks.

Our evidence focused on the need to better align funding and governance settings with how freight moves. That includes recognising freight demand in infrastructure funding models and embedding resilience into investment decisions.

Freight performance is directly tied to the condition of local roads. The funding system needs to reflect that more clearly.

You can watch Dr. Hermione Parsons’ appearance here

The Australian Government has confirmed that the Economic Resilience Program is now open, offering zero-interest loans to support businesses affected by current market conditions. Businesses with annual turnover up to $1 million can apply for loans of up to $5 million through participating banks, including Commonwealth Bank, Westpac, NAB, ANZ, Bank of Queensland, Bendigo Bank and Judo Bank. Additional banks are expected to come online. Industry associations have already raised questions about eligibility, which the Department is working through. 

The updated Singapore–Australia Free Trade Agreement protocol came into effect on 20 April, aimed at maintaining the flow of essential goods, including fuel. At the same time, additional diesel supply has been secured, with around 200 million litres contracted through BP, Viva Energy and Export Finance Australia. 

The fire at the Viva Energy refinery reduced production levels, with diesel and jet fuel operating at around 80 per cent of normal output and petrol at about 60 per cent. Production is expected to recover above 90 per cent in the coming weeks. 

Fuel stock levels are steady. As of mid-April, petrol sits at 46 days, jet fuel at 30 days, and diesel at 31 days. Overall, stocks have lifted slightly, although diesel remains unchanged. Current advice is that supply should be sufficient to meet demand over the next four weeks. 

At the retail level, availability has improved. Diesel outages have reduced from 147 sites to 112 nationally, with around 100 sites reporting regular unleaded outages. In the context of roughly 8,300 fuel sites across the country, these outages are relatively small and are generally short in duration. 

Prices remain volatile, although there has been some easing in recent days as fuel excise reductions start to flow through. Pricing continues to reflect both international benchmarks and shifts in market sentiment. The Department has asked to be notified where reductions are not being passed on. 

AdBlue supply is holding. Industry is carrying around eight weeks of technical-grade urea, with a further five weeks held in the government stockpile. Supply arrangements are confirmed through August, with ongoing monitoring. 

On supply flows, diversification continues. Fuel cargoes are now arriving from non-traditional sources, including the United States Gulf Coast. One shipment of around 10 million litres of diesel has arrived in Melbourne, with further cargo scheduled. Across the system, about 50 fuel tankers are at sea, representing roughly 17 days of supply. 

Globally, the market is still adjusting to disruption in the Persian Gulf. Alternative routes are being used, including pipelines from Saudi Arabia to the Red Sea and increased supply from North America. Shipping conditions remain uncertain, with operators cautious about moving through higher-risk areas without confidence in safe passage. 

The aviation sector reported that supply remains available across both major and regional locations, with only minor and short-term disruptions. Cost pressures are continuing, particularly for jet fuel and ground operations. Planning is underway across the sector in case conditions tighten further. 

Regional aviation operators noted that supply is generally held, with occasional outages typically resolved within 24 hours. There are early signs that tourism demand is being affected by shifts in consumer confidence. 

From a road freight transport perspective, industry feedback is that recent government measures are starting to take effect. This includes tax relief, zero-interest loans, and industrial settings. Operators are reporting a reduction in immediate supply concerns and a general easing in anxiety levels. 

Rail operators advised that fuel levies have increased, and there are early indications that some freight is shifting from rail under current pricing conditions. This is still being worked with members to confirm the extent of the impact. 

Maritime operators reported stable supply across ports, including regional locations, with close monitoring in areas affected by weather and access constraints. Cost pressures are becoming more visible in services to remote communities, particularly where supply options are limited. 

Industry also noted that fuel surcharges are being applied across logistics operations and have started to come down slightly. Earlier in the period, some operators had been sourcing fuel from retail sites due to pricing differences, although this has eased. 

Australia remains at Fuel Security Level 2. The Australian Government’s focus is on maintaining this level, with regular coordination through the National Cabinet. International engagement is continuing, including working with partner countries on maritime security and the conditions for reopening key shipping routes.  

Ahead of the opening of the Economic Resilience Program (ERP), ALC met with the National Reconstruction Fund Corporation, including Daniel Silkstone and Rebecca Mannen, to discuss the Prime Minister’s newly announced $1 billion ERP.  The program will be administered by the National Reconstruction Fund Corporation, which currently manages $15 billion in government capital. It will provide zero-interest loans to businesses of any size impacted by the current fuel price spike, with full program details to be released in the next two weeks. Eligible sectors are expected to include transport, freight transport and freight logistics, fuel, fertiliser and plastics, with logistics a new inclusion for the NRFC. Most funding will be distributed through commercial banks, while larger businesses will apply directly to the NRFC. Loans under $10 million will be available with no formal cap, and eligibility will be based on ANZSIC classifications, which are expected to be released shortly. The focus is on getting funding out quickly. 

For our industry, this creates a direct pathway for small- and medium-sized road transport operators to access interest-free finance amid sustained cost pressures. In discussions, ALC reinforced that freight transport and freight logistics are central to how the economy functions under strain, with a focus on the underutilisation of freight rail and the need to strengthen sovereign capability across the network. The point was made clearly that this is not a short-term issue. The current fuel pressure is part of a longer period of disruption, and the response needs to support both immediate stability and longer-term resilience. 

The Australian Institute of Criminology presented early findings from its national study on crime affecting critical infrastructure, based on industry-provided data. The dataset covers more than 6,300 incidents reported by 24 infrastructure entities across all jurisdictions, with the strongest representation from energy, telecommunications, rail and road sectors. 

Most incidents involve theft, particularly of copper and other metals. Property damage, trespass and forced entry are also common, often occurring alongside theft. The activity is not evenly spread. A small number of sites account for a disproportionate share of incidents, with around 10 per cent of locations responsible for roughly a third of reported activity. These sites are being targeted repeatedly. 

Timing patterns show incidents occurring in early morning hours and during periods where sites are unattended, particularly over weekends. Reporting peaks on Mondays, reflecting when incidents are discovered rather than when they occur. Repeat targeting is a consistent feature. More than half of repeat incidents occur within a week of the first event, and some occur within the same day. This indicates offenders are identifying vulnerabilities and returning quickly. 

High-risk sites are more likely to experience multiple offence types in a single incident, including trespass combined with theft, and tend to involve larger quantities of material being taken. Rail and road infrastructure are more prominent in this group. These sites appear to be targeted because they offer higher returns and easier access. 

Financial impacts are concentrated. While many incidents are relatively low-cost, a small number account for many losses. One in five incidents accounts for more than 75 per cent of total recorded costs, with reported losses exceeding $44 million across the dataset. This figure is incomplete and does not capture undetected incidents or broader impacts such as service disruption and recovery costs. 

Geographically, incidents are spread across metropolitan and regional areas, with fewer recorded in remote locations. There is no clear link to socioeconomic status. Targeting appears to be driven by access to assets and the ability to move stolen material rather than local demographic factors. International evidence supports this, particularly the link between theft and proximity to scrap metal dealers. 

Police data shows low rates of offender identification. Where offenders are known, most have prior criminal histories, including previous offences involving infrastructure. This points to repeat and targeted activity rather than isolated incidents. 

The AIC noted that the data reflect only reported incidents and are likely to understate the scale of the issue. Further work is underway, including analysis of police data in Queensland and New South Wales, as well as additional industry input. 

The AIC online survey for stakeholder submissions is open until June 30, 2026. 
https://survey.aic.gov.au/surveys/MobileSurvey.aspx?&isintercept=False

Over this period, the Australian Government’s response has shifted from short-term relief to a more deliberate focus on economic resilience. The key shift is that fuel is now being treated less as a household cost-of-living issue and more as a national economic continuity issue. That is clear in the Government’s Economic Resilience Program, which provides zero-interest loans to businesses in the fuel, fertiliser and other critical supply chains affected by global market disruption. The Government has explicitly linked this program to keeping trucks, trains, planes and critical production activities operating 

On supply, the Government has remained active -additional diesel volumes have been secured through a mix of commercial arrangements and government-to-government engagement, particularly across Asia. These shipments are being used to support supply through the coming weeks, not just to respond to an immediate shortfall. It is a forward-leaning approach aimed at maintaining stability. 

The fire at the Viva Energy refinery in Geelong continues to shape the policy response. While the facility has maintained partial operations, the incident reinforced how exposed the system is to disruption at a small number of domestic refining sites. The Government’s decision to continue securing imports and keep fuel security settings under review reflects this.  

The Australian Competition and Consumer Commission has continued its monitoring and enforcement posture, with a clear focus on whether the excise reduction is being passed through. Petrol prices have generally responded, but diesel has been slower to adjust despite movements in global markets. As an industry, we know this gap is important – diesel sits at the bottom of the entire freight task, so when it remains elevated, the cost pressure continues to move through supply chains. 

That puts the focus squarely on the freight transport and logistics network. Road tankers, freight rail capacity, port throughput, storage and workforce availability are now part of the fuel response discussion. If those parts of the system tighten further, the impact will be felt regardless of how much fuel is secured at a national level  

It is encouraging to see the Government is not relying on a single lever. It is managing pricing, supply, business continuity, and market behaviour simultaneously. The test here is whether those settings translate into consistent fuel movement nationwide.