Fair Work Commission Fuel Cost Recovery Order – What you Need to Know

The recent sharp increase in fuel costs have placed financial pressure on road transport operators. 

In response, the Fair Work Commission issued the Road Transport Contractual Chain Order – Fuel Cost Recovery – 2026 (RTCCO) on 20 April 2026. 

The RTCCO addresses fuel cost recovery and has far-reaching implications for businesses operating in complex commercial supply chains.

Summary of Key Points

• The order operates from 21 April 2026.
• Parties in a road transport contractual chain must adjust transport rates at least fortnightly (or twice monthly) to reflect fuel cost increases.
• Primary parties in a road transport contractual chain must take reasonable steps to ensure downstream compliance and that that the other primary party recovers the increased cost of fuel.
• Disputes may be referred to the Fair Work Commission
• Civil penalties may apply for breach.
• The RTCCO will be reviewed monthly, then quarterly. It automatically ceases when diesel prices fall below $2.00 per litre based on national benchmarks.
• The RTCCO demonstrates that regulation can now respond promptly to changes to economic circumstances.

What you Should Do

Businesses should immediately seek advice on:

• whether the business is required to absorb or pass through cost increases pursuant to the Order
• whether existing contracts contain mechanisms capable of satisfying the requirements under the Order.

The Details

The RTCCO requires parties to implement mechanisms that enable fuel cost recovery, with obligations potentially extending upstream to those who control pricing within the chain. 

This reflects a deliberate policy choice to prevent cost pressures being pushed down to the most vulnerable participants in fragmented contracting models.

The key impetus for the decision was the recent sharp increase in fuel costs and the resulting financial pressure experienced by transport operators. 

Legislative amendments designed to respond quickly to national economic shocks enabled the Commission to bypass the usual extended consultation timelines.

What is Required

The RTCCO imposes mandatory, ongoing pricing adjustments across the entire contractual chain to ensure that parties in road transport contractual chains can recover the increased cost of fuel. Rate must be adjusted fortnightly or twice per calendar month.

The adjustments may be in the form of:

• an adjustment to the rate payable under the relevant contract;
• the introduction of a fuel increment or levy;
• the introduction of a direct reimbursement or offset of the increased cost of fuel;
• existing rise and fall rates in contracts, industrial instruments or collective agreements which address recovery of increased fuel costs; or
• an ongoing arrangement which adjusts the rate in pursuant to an agreed formula or cost model to address the increased cost of fuel.

Who is Covered

The RTCCO applies to all parties in a road transport contractual chain. 

This includes:

• primary parties (for example manufacturers and retailers);
• secondary parties, namely parties to a subsequent contract such as logistic providers;
• contractors and “employee-like” workers;
• road transport businesses;
• digital platform operators.

It applies to businesses who require delivery of freight by road, the drivers and any sub-contractors between them.

Businesses who do not directly engage drivers may fall within the ambit of the RTCCO.

Non-compliance

Breaches of the Order may expose businesses to penalties. 

Disputes can be escalated to the Commission, including arbitration by consent.

Key Takeaway 

Businesses should seek advice on their existing contracts promptly to ensure compliance with the Order.