A disruption to fuel distribution is creating new headwinds for Australian builders. Western Australia and New South Wales are both responding. But they are taking meaningfully different approaches to the same problem.

The Problem on the Ground

The construction industry runs on diesel. Excavators, concrete trucks, delivery vehicles, cranes and equipment all depend on it. When fuel supply becomes unreliable or expensive, the effects move through the industry fast.

That is the situation Australian builders are now navigating. Ongoing conflict in the Middle East is creating pressure on global fuel supply chains. The impacts are uneven, but they are real.

In New South Wales, the disruption has already translated to shortages at the pump. As of 25 March 2026, the NSW Government reported 32 service stations without any fuel type, with 187 stations statewide lacking diesel products. The shortages are hitting both regional and metropolitan areas.

In Western Australia, the concern is more forward-looking. Prices are rising and supply chain vulnerability is being flagged. The state has not yet seen the same distribution failures as NSW, but the Cook Government is not waiting for that to change.

Western Australia: Getting Ahead of It

The WA response has been industry-led and collaborative. Treasurer Rita Saffioti and Housing and Works Minister John Carey convened a roundtable with builders, developers, industry bodies and local government representatives to map out what is happening and what comes next.

The conversation covered fuel security, but it did not stop there. The meeting also addressed rising costs across a range of key inputs, including concrete, PVC pipes, bricks, asphalt and shipping. These are the materials that make up a house. When their costs move in the same direction at the same time, the pressure on a builder’s margin is significant.

A series of practical measures emerged from the meeting:

The government flagged an intention to review approval requirements, with a view to reducing friction in the delivery pipeline. It is also working with local governments to temporarily expand allowable working hours on building sites, specifically to accommodate cement deliveries and reduce transport costs. A review of bitumen content requirements for subdivision roads and crossovers is also on the table as a way to ease cost pressure.

On the pricing side, the WA Government indicated it would explore industry practices to ensure that fuel-related cost increases are transparent and temporary, rather than being permanently embedded into consumer prices. That is a meaningful focus. Cost pass-through that outlasts the original disruption has been a pattern in previous supply chain events, and builders bear the consequences on both sides of it.

The government has also committed to regular ongoing engagement with industry and intends to advocate to the Commonwealth for additional support. It is also pointing toward public transport use as a way to reduce civilian fuel demand and preserve supply for industrial purposes.

WA Housing and Works Minister John Carey described the challenge directly: the industry is already working hard to recover lost ground from the COVID-era disruption to housing and rental markets. Fuel insecurity is an added layer it did not need.

New South Wales: Moving to Emergency Footing

The NSW response reflects a different situation. The distribution problem is already here, and the government is acting accordingly.

Premier Chris Minns was clear that this is not a supply shortage at the national level. Fuel is still arriving in Australia. The issue is how it is being moved around within the state.

To address that, the Minns Government is standing up a Liquid Fuel Emergency Operations Centre in Parramatta. The centre will be operational within 24 hours of the announcement and will be led by the Department of Climate Change, Energy, the Environment and Water. Staff from Transport for NSW, Infrastructure NSW, NSW Fair Trading, NSW Police and a range of other agencies will work out of it.

The centre will track availability, identify pressure points, forecast future supply needs across agriculture, freight, construction and mining, and coordinate with industry to redirect fuel where it is needed most.

Alongside the operations centre, Energy Minister Penny Sharpe will compel major fuel companies to provide information on their supply plans, particularly for regional communities. Those companies account for more than 85 per cent of liquid fuels entering Australia, which gives the government significant leverage if it chooses to use it.

The intent is to enforce transparency. Where fuel is going, when, and in what volumes, rather than relying on industry to self-report.

What This Means for Builders

The immediate risk for builders is cost. Diesel prices that move sharply upward eat into margins that are already thin. For fixed-price contracts, that exposure sits entirely with the builder unless contract terms allow for variation.

The secondary risk is delivery reliability. Concrete pours, materials drops, equipment movements and subcontractor travel all depend on fuel being available when and where it is needed. A site that cannot receive a concrete delivery on schedule creates a cascade of delays that costs money regardless of whether the pour eventually happens.

In NSW, the distribution problem is already creating those scenarios. Builders and project managers in affected areas need to be building contingency into their schedules and having direct conversations with suppliers about delivery reliability in the coming weeks.

In WA, the risk is somewhat more prospective. But the pattern from similar global events suggests that waiting until the problem arrives is the wrong approach. The government’s decision to engage industry early is the right instinct.

The practical steps coming out of the WA roundtable are worth monitoring. Extended working hours on sites could provide meaningful productivity gains if implemented well. Approvals reviews, if they translate into actual streamlining, reduce time costs that compound during periods of other pressure.

The Bigger Picture

Australia’s housing supply challenge is well documented. Both WA and NSW are running hard to deliver more homes into markets under serious demand pressure. Fuel insecurity adds a new variable to an already difficult delivery environment.

What is useful about the current responses from both governments is that they are treating construction as critical infrastructure rather than an afterthought. The WA roundtable explicitly framed housing delivery as a reason to take fuel security seriously. The NSW operations centre explicitly lists construction alongside agriculture, freight and mining as a sector whose supply needs will be forecast and prioritised.

That framing matters. When government is coordinating fuel supply, the industries that have been identified as priorities are the ones that will have the most visibility in that process.

Builders in both states should be watching how these measures develop. Engaging through industry associations at this stage, while responses are being shaped, is more useful than waiting to react once policy is set.

The conflict in the Middle East is not going to resolve quickly. Global supply chains will remain under pressure. What both governments are signalling is that they intend to manage that pressure proactively rather than wait for it to become a crisis.

For builders, the message is similar. Cashflow management, contract terms, supplier relationships and delivery contingencies are the levers that are within reach. Now is the time to review all of them.

Author: TGB Editorial