Budget funds fuel supply, but leaves the cheapest fuel security measure unfunded
FOR IMMEDIATE RELEASE
Date: 12 May 2026
Contact: Bruce Hardy | +61 407 040 954
Energy Futures Foundation says the 2026-27 Budget proves fuel security is now a national economic issue, but Australia still needs a plan to use less diesel in freight.
The Federal Government has acted on fuel supply at scale, but has not yet funded the cheapest part of fuel security: reducing the amount of diesel that critical supply chains need.
Energy Futures Foundation said the 2026-27 Budget put fuel security at the centre of national economic policy. But the response was overwhelmingly supply-side.
The Budget includes the $14.8 billion in total support for diesel supply via the Strengthening Australia's Fuel Resilience Package, including more fuel storage, a billion-litre strategic reserve, a fuel and fertiliser finance facility, as well as the cost of temporary fuel-tax relief.
The only structured road-freight demand-side measure is $40.5 million for Australia Post fleet electrification.
EFF Executive Director Bruce Hardy said the Budget focused on the right challenge, but stopped short of a long term plan to address our dependency on volatile imported diesel:
Bruce Hardy, Executive Director, Energy Futures Foundation, said:
“The Government has acted on fuel supply, and that matters. But a billion litres in reserve buys time once. A freight task that needs fewer litres every year buys permanent resilience.
The cheapest reserve is the litre of diesel the economy no longer needs.
That means deploying electric trucks where it already makes commercial sense, concessional finance that small and medium operators can use to get over the up-front cost hurdle in transitioning to electric, supporting charging infrastructure for businesses as well as consumers, and fixing out of date regulations so cleaner trucks can get on with the job.”
The Budget papers, and the Treasurer’s speech last night made the case against long term diesel dependency for our freight task. The fuel shock from conflict in the Middle East, the effect on inflation and food costs, and the fact that liquid fuels make up about 10 per cent of road transport costs, compared with less than 1 per cent for business on average.
The predominantly small businesses that make up our freight industry are already carrying that risk. NatRoad has warned that around 40 per cent of surveyed operators had turned down or cancelled work because of fuel costs. Livestock and rural transporters have welcomed better reserves, but warned it only works if diesel reaches regional Australia when supply fails.
"This is the point," Mr Hardy said.
"Every freight voice is describing the same exposure, and the same lasting anxiety. Road operators are asking for ongoing relief. Farmers are wondering whether fuel will reach them.”
"EFF's view is simple: we don’t need to choose one freight sector over another. A fuel security plan that reduces avoidable diesel wherever the technology and economics already work will free up supply for everyone else. Reducing our demand extends how far our reserves can go."
EFF said the missing freight package is practical and fiscally disciplined. It should include:
Concessional finance for electric trucks, with a clear SME pathway
Depot, hub and corridor charging treated as freight infrastructure
No-regrets regulatory reform, including road access, mass concessions and curfew exemptions in key freight hubs
A clear hierarchy for scarce low-carbon liquid fuels, prioritising aviation and shipping before road freight where trucks can electrify
An evidence stack comparing the cost of stockpiling fuel with the value of cutting diesel demand permanently
The Government's own fuel-resilience material says targeted support for electric vehicles, charging stations and heavy vehicle reform are investments in long-term fuel resilience.
But EFF said the Budget did not yet turn that statement into a funded road-freight program.
"The Government has set its own precedent," Mr Hardy said.
"If an off-budget finance facility is responsible for fuel supply, the same logic can support off-budget finance for fuel demand reduction. A disciplined freight-electrification package would help operators manage costs, cut exposure to global oil shocks, and keep essential goods moving."
"The Government should complete the fuel-security response it has started," Mr Hardy said.
"Supply matters to alleviate this crisis. Demand reduction is what prevents the next one."
About Energy Futures Foundation
Energy Futures Foundation is an independent not-for-profit working with industry, government and partners on practical policies to cut fuel exposure, reduce emissions and lift productivity in freight and heavy transport. EFF is a registered charity.
