Rising Fuel Costs and Back-to-Back Rate Hikes: What Business Owners Can Do Now

Petrol prices have jumped roughly 50 cents a litre since the start of the Iran conflict, and the RBA just raised interest rates for the second month in a row. For business owners who rely on fuel to operate, that's a double hit landing at the worst possible time.

The Strait of Hormuz disruption has sent fuel costs surging across Australia, with average prices now above $2.19 per litre. At the same time, the RBA's March decision to lift the cash rate to 4.10% means borrowing costs are rising too. All four major banks have confirmed they're passing on the full 0.25% increase, with new rates kicking in from late March.

Who's feeling it most

Trades, transport, logistics, agriculture and regional operators are the hardest hit. For these businesses, fuel isn't a line item you can trim: it's fundamental to the work.

CPA Australia's Gavan Ord put it bluntly: "Every trip, delivery and service call now costs more. Businesses can't absorb these increases indefinitely, and many are running out of options."

The squeeze is coming from both directions. Fuel costs hit immediately, while the rate hike adds pressure to anyone with variable-rate borrowing. And with the RBA signalling it's prepared to keep raising if inflation doesn't ease, there's no assurance this is the last increase.

The numbers worth knowing

The double hit looks like this in practice:

• Fuel: Up ~50c/L nationally. For a tradie doing 1,000km a week, that's roughly $65 to $70 extra per week, over $3,400 a year.
• Finance: On a $100,000 loan at a variable rate, back-to-back 0.25% hikes add around $40–50 per month.
• Combined: A small operator with a vehicle, equipment finance and regular fuel costs could be looking at $5,000–7,000 in extra annual costs compared to three months ago.

What to do about it

The worst response is to freeze. The businesses that come through cost squeezes are the ones that act early, not the ones that hope it blows over.

Audit your recurring costs. Most businesses are paying for subscriptions, software and services they're not fully using. Go through every monthly charge and cut what isn't earning its keep. Even small wins add up when you're doing it across 10 or 15 line items.

Renegotiate supplier contracts. Your suppliers are feeling the same pressure. That doesn't mean they won't negotiate: it means they'd rather renegotiate than lose you. Pick up the phone, especially on fuel cards, materials and regular deliveries.

Review your energy contracts. If you haven't looked at your electricity or gas rates in the last 12 months, you're probably paying more than you need to. Energy comparison takes an hour and can save thousands a year.

Batch trips and deliveries. Simple but effective. Fewer trips means less fuel. If you can consolidate deliveries, combine site visits or adjust scheduling to reduce kilometres, it's money back in your pocket immediately.

Check your finance costs. If you have vehicle or equipment loans from 12+ months ago, your rate may not be competitive anymore. It's worth checking: even a small improvement on a $100,000 loan makes a real difference month to month.

The common thread: don't wait. In a rising-cost environment, every week you delay a decision is a week you're paying more than you need to.

Update, June 2026: the cash rate rose again in May, to 4.35%, and the RBA left it unchanged at its 16 June meeting while it assessed the response to the earlier rises and the oil supply disruption.

This article is general information only and is not financial advice.