Modelled scenario from an industry-commissioned report: extra diesel cost of the 2026 price rise, if held for a year, as a share of private-sector engineering construction work, Australia

What it is. 1.2% of the annual value of engineering construction work done by the private sector in 2025: the extra diesel cost to civil contractors of a 145 cents a litre rise in terminal gate price (national average, end of March 2026 against 27 February), if sustained for 12 months ($1.53 billion).

Sample. A scenario from a report commissioned by the Civil Contractors Federation, written in April 2026. Diesel use is the 88 million litres a month used by the federation's 1,150 member firms (Chart 10, from a CCF member survey); the price rise is the national average terminal gate price rise of 145.2 cents a litre (88.9%) between the start of the Middle East conflict at the end of February and the end of March 2026; the denominator is the report's own figure for private-sector engineering construction work done in 2025 (ABS), which the report does not state in dollars. The arithmetic matches (88 million x $1.45 = $128 million a month; x 12 = $1.53 billion), but the report's own key numbers also give 1.15 billion litres a year, which is more than 88 million x 12 (1.06 billion); the 1.2% was not recalculated. The CCF Tasmania release (considered below) says members nationally use around one billion litres a year, which fits 88 million x 12; at 1.15 billion litres the cost would be about $1.67 billion, 1.3%. The report does not state the denominator in dollars: $1.53 billion at 1.2% implies about $127.5 billion, which fits ABS engineering construction work done by private-sector contractors (public and private clients, all engineering types) rather than by civil contractors alone or for private clients alone. For scale, by 3 April the wholesale diesel price was still 127.3 cents a litre (78.0%) above pre-war, before the 30 March excise cut had fully passed through; the report notes much civil diesel is off-road and does not get the excise cut. It also reports the CCF's margin estimates (about 5% on $1 million projects, 3 to 5% up to $1 billion, 1% above $1 billion) and that the CCF estimates 80 to 95% of civil contracts by number are fixed price.

What it is not. An advocate's scenario, not a measured overrun and not an observed cost: the price rise is observed, the litres come from a member survey, and the year of sustained prices is an assumption. The report was commissioned by the Civil Contractors Federation, whose own cost calculator (considered above) puts direct fuel at about 5% of a civil project's cost, which at an 88.9% price rise would be about 4.4% of that project, so 1.2% of all private engineering work is not what a civil contractor should expect on its own work. The numerator is the extra cost of diesel to the federation's member firms only, over the whole industry's private work, and it assumes the price rise lasts a full year with nothing recovered through rise and fall, variation or a falling price; the report says some contracts do carry rise and fall but gives no share of the cost that was recovered. It is a share of a year's industry turnover, not of a contract, so it is not offered to be multiplied by a contract value. The cost is the contractor's when a contract is fixed price, but the report does not say how much of it was. It covers diesel, not other plant costs such as standby or hours above plan, and not indirect fuel in bitumen or materials.

Where it came from

• Corinna Economic Advisory (Saul Eslake), prepared for the Civil Contractors Federation (2026), The Impact of the Middle East Fuel Crisis on Australia's Civil Construction Sector
  p.9 (text after Chart 10: 'This annual figure represents 1.2%...'); p.8 ($128 million a month from 88 million litres and 145 cents); p.3 (145.2 c/L, 88.9%) · source record

Considered and set aside

• ABC News (Clare Armstrong): The CCF chief executive tells the reporter that diesel is about 7.75% of any tender and an extra $46 million on a billion-dollar project (4.6%). The article does not show how $46 million was worked out or which price rise it assumes, and it is a lobbyist's statement to the press, so it is not filed. It is a share of a tender (4.6%), not of all engineering work, so it does not sit beside the Eslake 1.2%: the two differ by about four times because the denominators and the diesel counted differ.
• Civil Contractors Federation: Gives 7.75% of contract value as the default 'fuel-impacted' proportion (5% direct fuel, 2.75% indirect) to be multiplied by the change in terminal gate price. That is a guideline cost share the user adjusts, not a measured overrun, and by the review ruling a composition share is not evidence of the cause.
• Civil Contractors Federation Tasmania: Tasmanian chapter's release: fuel up to 30% of project input costs and bitumen sealing cost up 30%. No method or sample, and Tasmania only.
• Australian Taxation Office: The off-road diesel credit fell from 52.6 to 20.6 cents a litre on 1 April 2026 after the excise cut. It is a tax rate that changes what a contractor nets, not an amount priced or an overrun.
• Bureau of Infrastructure, Transport and Regional Economics (BITRE): Fuel is 5.76% of road construction cost (Table B2) and equipment 27.44%: a cost composition, filed as context, not a measure of fuel above what was priced.

overrun/plant_fuel_diesel_shock_share_of_engineering_work_au · AU · F42 ·the record ·link to this figure ·dispute this figure(or email support@demiton.io)