Most transport operators can tell you their fuel price to the cent and their cost per kilometre to the nearest guess.
That is backwards. Fuel is one input. Cost per kilometre is the number that decides whether the job you just quoted makes money.
And it moved twice this year.
Build it from the bottom up
Nine components. Miss any and the number is wrong in your favour, which is the dangerous direction.
Fixed costs — incurred whether the truck moves or not
| Component | Typical annual, heavy rigid | Notes |
|---|---|---|
| Registration and permits | $8,000–$14,000 | Varies by state and mass limit |
| Insurance | $12,000–$22,000 | Up sharply; some premiums +60% since 2019 |
| Finance / lease | $18,000–$40,000 | Interest costs up 36.3% since March 2020 |
| Depreciation | $15,000–$30,000 | Use actual resale reality, not the tax schedule |
| Compliance, NHVAS, telematics | $2,000–$5,000 | |
| Fixed subtotal | $55,000–$111,000 |
Variable costs — incurred per kilometre
| Component | Typical | Notes |
|---|---|---|
| Fuel | Largest single line | See below |
| Tyres | 3–6c/km | Higher on rough surfaces and multi-axle |
| Maintenance and servicing | 8–15c/km | Rises steeply past 700,000km |
| AdBlue | 1–2c/km |
Labour
Driver wages, plus 12% superannuation, plus payroll tax if above your state threshold, plus workers compensation. Award rates rose 4.75% from 1 July 2026.
Critically: pay time, not distance. Loading, unloading, queuing, fatigue breaks and pre-start checks are paid hours that generate no kilometres. A run that looks fine at 60km/h average looks very different at 38km/h door to door.
The fuel line, correctly
Excise moved four times in five months. Most operators are still quoting off an outdated number.
| Period | Excise |
|---|---|
| Before 1 April 2026 | 52.6c/L |
| 1 Apr – 30 Jun 2026 | 20.6c/L |
| 1 Jul – 2 Aug 2026 | 36.6c/L |
| From 3 August 2026 | 53.7c/L |
The restored rate is above the pre-crisis baseline, because excise is indexed. There is no “back to normal” arriving.
Fuel tax credits. Heavy vehicles over 4.5t GVM travelling on public roads claim excise less the road user charge. Off-road and auxiliary use claims closer to the full rate. The credit rate moves with the excise rate, so your net position changes whenever excise does — which it did, four times, this year.
If you have not recalculated your claim since 3 August, do it this week. Confirm your entitlement with your accountant rather than assuming; the rules turn on mass, use and road type.
Worked example
Heavy rigid, 80,000km a year, 35L/100km:
| Line | Annual | Per km |
|---|---|---|
| Registration and permits | $11,000 | 13.8c |
| Insurance | $17,000 | 21.3c |
| Finance | $28,000 | 35.0c |
| Depreciation | $22,000 | 27.5c |
| Compliance and telematics | $3,500 | 4.4c |
| Fuel (28,000L @ $2.05, net of FTC) | $51,240 | 64.1c |
| Tyres | $3,600 | 4.5c |
| Maintenance | $9,600 | 12.0c |
| Driver (loaded, incl. 12% super) | $96,000 | 120.0c |
| Total | $241,940 | ≈ $3.02/km |
Add an overhead allocation — yard, admin, management, compliance staff, bad debts — typically 10–18% of direct cost. Call it 14%:
True cost per kilometre ≈ $3.44.
Now ask the uncomfortable question: what are you actually charging per kilometre on your worst customer?
Where operators get it wrong
Using tax depreciation instead of real depreciation. The instant asset write-off and the diminishing value schedule are tax instruments. Your truck’s actual value falls on its own schedule. If you cost using the tax number, you will under-price and be surprised at replacement time.
Costing on loaded kilometres only. Empty running is a cost. If 22% of your kilometres are deadhead, your effective cost per revenue kilometre is roughly 28% higher than your raw figure.
Forgetting the truck stops. Fixed costs accrue during breakdowns, waiting time and driver leave. Costing on theoretical utilisation rather than actual overstates your kilometres and understates your cost per kilometre.
Averaging across a mixed fleet. A prime mover and a light rigid have completely different economics. Cost each vehicle class separately or you will subsidise one with the other without ever seeing it.
Ignoring the cash cycle. Australian small businesses are paid in an average of 24.1 days, settled 6.9 days late. You pay for fuel now and get paid in a month. That gap has a cost, and Payday Super — live since 1 July 2026 — moved superannuation from quarterly to every pay run, compressing it further.
What to do with the number
Rank every customer and every lane by margin per kilometre. Not revenue. Margin. Most operators find one or two lanes carrying nearly all the profit and one quietly losing money that everybody has grown used to.
Introduce a fuel surcharge tied to a published index if you do not have one. It is far easier to get accepted than a base rate increase because it is visibly outside your control and it falls again when fuel does. That last part is why customers say yes.
Check every fixed-price contract signed before March 2026. It was priced in a different economy. Quantify the remaining exposure and how long it runs.
Re-quote anything under your true cost. Work priced below cost does not become profitable through volume — it consumes the capacity, cash and management attention you would otherwise put toward work that pays.
The industry context
Transport sits inside a sector under sustained pressure. 14,011 Australian companies entered external administration in FY2025-26, and the common thread across the worst-affected industries is the same: fixed-price exposure meeting rising input costs meeting slow payment.
Fuel is the most visible pressure — 51% of Australian SMEs named it their single biggest cost concern. It is not the largest. Labour is, at roughly half the weighting of the small business cost index.
But fuel is the one your customers can see on a sign by the road, which makes it the easiest pricing conversation you will have all year. Use it — and use it to open the harder conversation about whether your rates reflect any of the last four years.
Where to go next
- Fuel Excise Cost Calculator — run it on your fleet
- Fuel Excise Is Back at 53.7c
- Repricing Freight Rates After the 2026 Fuel Shock
- Gross Margin by Service Line — apply the same logic to lanes and customers
- Business Cash Flow in Australia
Sources: Department of Infrastructure, Transport, Regional Development, Communications, Sport and the Arts; Australian Taxation Office fuel tax credits; Fair Work Commission Annual Wage Review 2026; ASIC insolvency statistics FY2025-26; ASBFEO Small Business Data Portal March quarter 2026; MYOB Bi-Annual Business Monitor May 2026; AMP Bank GO Small Business Cost Pressure Index 2026. Cost ranges are indicative and vary widely by operation. Confirm fuel tax credit entitlements with your accountant.