The Civil Contractors Federation (CCF) has issued a stark warning that the ongoing diesel crisis is inflicting more severe damage on the construction sector than the COVID-19 pandemic did. Skyrocketing diesel prices are placing immense pressure on contractors, with many struggling to keep projects viable.
Fuel costs skyrocket
According to the CCF, diesel prices have surged by over 50% in the past year, far outpacing general inflation. This has led to a sharp increase in operating costs for construction companies, which rely heavily on diesel-powered machinery and transport.
“The diesel crisis is worse than COVID for some in the construction sector,” said CCF chief executive Chris Melham. “During the pandemic, many projects continued with safety measures, but now we’re seeing projects being put on hold or cancelled because the cost of fuel is simply too high.”
Impact on small businesses
Small and medium-sized contractors are particularly vulnerable. Many operate on thin margins and cannot absorb the additional costs. Some have reported that fuel expenses now account for up to 30% of their total project costs, compared to around 15% before the crisis.
“We’re hearing from members who are considering shutting down their businesses because they can’t make ends meet,” Melham added. “This is going to have a ripple effect across the entire economy.”
Government urged to act
The CCF is calling on the federal government to intervene by temporarily reducing fuel excise and providing targeted subsidies for the construction industry. They argue that without immediate action, the sector could face widespread insolvencies and project delays.
“The government needs to understand the severity of this situation,” Melham said. “We need a fuel excise cut and direct support to keep the industry moving.”
Long-term solutions needed
While short-term relief is critical, the CCF also advocates for long-term measures to reduce the industry’s dependence on diesel. This includes investment in alternative fuels, electric machinery, and more efficient logistics.
“We can’t keep relying on a volatile global fuel market,” Melham concluded. “We need to future-proof our industry.”
The construction sector is a major driver of the Australian economy, employing over 1.2 million people. Any prolonged disruption could have serious consequences for housing supply, infrastructure projects, and overall economic growth.
