Australia’s latest fuel shock is rapidly shifting from a cost issue to a cash flow problem for business customers.
NAB Group CEO Andrew Irvine (pictured) says fuel price rises and supply uncertainty are tightening liquidity across key sectors, particularly transport, freight, agriculture, and regional communities.
“Fuel costs are creating real cash flow stress,” Irvine said in a media release. “The challenge is that many businesses are paid later, so there is a real liquidity issue as costs rise quickly.”
He notes that it is “not just the price of fuel that’s hurting. It’s also the uncertainty around supply,” with nervous businesses and consumers wary about how far and how long the shock will run.
NAB says its business bankers have proactively contacted almost 200,000 business customers since early March to understand fuel cost impacts and discuss options, with a focus on sectors such as agriculture, logistics, manufacturing, construction and regional supply chains.
While fuel and energy costs remain elevated, the bank reports that most customers contacted so far are managing conditions without seeking financial difficulty assistance, reflecting prior experience dealing with seasonal and input‑cost volatility.
On the ground, agriculture is feeling the strain. For activities like sowing, many farms now need 30,000 to 50,000 litres of diesel, adding an extra $30,000 to $50,000 to the cost of getting a crop in compared with just weeks ago.
That kind of step‑change in input costs can quickly filter through to business overdrafts, trade finance needs and the ability of farming clients to service existing investment and home loans.
Overlaying NAB’s customer‑level insights is a starker macro warning from Morgan Stanley, which sees Australia as “highly exposed to a global diesel supply shock, with low inventories raising the risk of shortages rather than just higher prices”. The bank highlights mining, agriculture, and consumer‑facing sectors as particularly vulnerable, and cautions that rationing or operational disruptions could create downside risks to growth through 2026.
Against that backdrop, Irvine says NAB’s economists still expect slower growth rather than an outright recession but concedes “that risk does rise the longer fuel prices stay elevated and the longer major supply routes remain disrupted”.
For brokers, the message is clear: keep a close eye on business clients’ cash flow buffers, talk early about restructuring options, and be ready to recalibrate strategies for first‑home buyers and property investors if the diesel shock starts to spill over into employment, incomes, and housing demand.
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