Fuel Crisis and CMPA Advocacy
The Secretariat has been advocating on behalf of the construction material industry due to the fuel crisis caused by the Iran war.
The industry forum on fuel supply in Victoria (Tuesday 31 March 2026), was attended by the Premier Jacinta Allan, the Minister for Energy and Resources Lily D’Ambrosio, industry representatives and Victorian and Commonwealth public servants. The following points were made by the Premier:
- The Iran war is putting pressure on fuel prices and supply.
- Currently Australia is at Level 2 of the National Fuel Security Plan however, this will change if there is further constriction in the market.
- There is a slight decrease in access to fuel which is mainly impacting regional Victoria.
- Will allow higher Sulphur content fuel and the flash point for diesel will be decreased from 61.5oC to 60.5oC
- Asian fuel refineries source fuel mainly coming through the Strait of Hormuz so they may seek fuel from other sources which are further away.
- Normalisation will take several months once the Iran War ceases.
- Advice is that Australia has guaranteed supply until end of April/early May 2026.
At the meeting, I raised issues that resulted from the CMPA survey (many thanks to those who responded).
- Regional fuel supply constricted especially in east Gippsland.
- Some diesel orders are only being partially filled.
- Some quarries having to purchase fuel from the bowser (retail) which is cash up front as opposed to being on account.
- Some customers are refusing to accept price increase and/or inconsistency of acceptance of price increases across government’s various infrastructure projects.
- Some quarries indicated that if the diesel price reached $4/l it would trigger a collapse.
- An estimate for quarry diesel fuel consumption in Victoria was given at ~8 million l/month (TBC).
- The full CMPA survey results will be submitted to the Victorian government’s State Energy Emergency Team.
The following additional information was submitted to the State Energy Emergency Team requests (in bold):
Insights on production cost pressures and the point at which these may translate into genuine disruption
- 84% have experienced additional costs due to the fuel shortages.
- 80% indicated adverse impacts on production.
- 90% indicated adverse impact (increased time spent on administration) on management and administrative systems due to increasing fuel price.
- Comments: Local and State Government are pushing back requests for fuel price-based increases.
- Suppliers are reportedly increasing prices up to 15%.
- Genuine disruption to the quarry industry is already occurring and will continue to accelerate as the fuel price rises. A pinch point for some is $4:00/l
Indicative estimates of petrol and/or diesel usage
An approximation would be ~8 million l/month (TBC) of diesel for the quarry sites operating in Victoria. This excludes freight, suppliers’ requirements, diesel electricity generation (some regional sites) and employees travelling to and from work.
Details of any mitigating strategies or workarounds currently being implemented by industry, and how long these are expected to remain viable
Upgrading security for fuel stored on site. Fuel conservation, for example:
- Limiting travel of mobile plant on site
- Reducing the amount of stripping of overburden/drilling
- Limiting movement of processed construction material on site
Letters advocating for the construction material processors industry to be an essential service have been sent to the Minister for Energy and Resources The Hon Lily D’Ambrosio MP and Minister for Climate Change and Energy The Hon. Chris Bowen MP.
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