Fuel Volatility Is Reshaping Construction Decisions in 2026

by Stuart Wallace, Chief Revenue Officer – Akura Pty Ltd

The escalation in the Middle East disrupted one of the world’s most critical energy supply routes. When that happens, the impact doesn’t stay confined to oil markets. While construction may be geographically removed, it’s directly exposed, with effects flowing quickly into fuel, freight and materials.

When oil supply is constrained and freight routes tighten, energy-intensive materials used in production and transport are the first to move. Concrete and steel fall squarely into this category. Petrochemical products are even more exposed. Materials like plastic piping are directly tied to oil and gas, which is why we’re seeing sharper increases there.

It’s a system-wide shift. Government measures initiated in March 2026, like the temporary halving of the fuel excise and removal of the heavy vehicle road user charge, may ease some immediate pressure but they don’t offset the scale of increases now flowing through materials and supply chains.

Where does this impact hit hardest across industrial projects?

In industrial construction, volatility bites hardest where work is plant-heavy, freight-reliant and time-sensitive. Civil and early earthworks feel it first because diesel underpins almost every move on site. From there it flows into the big packages — concrete, structural steel, precast and services — where energy-intensive production and transport risk get priced in fast. The takeaway is simple: the more a package depends on transport, fixed delivery windows or limited suppliers, the less room you have to “wait and see.”

That’s why early engagement matters — it gives you the window to confirm availability, secure slots, and commit to the packages most exposed to freight and fuel movement.

What risks do developers face if they assume pricing stays stable?

Assuming pricing will hold in a volatile market creates a gap between feasibility assumptions and delivery reality. When costs move quickly, that gap tends to show up early and compound from there.

Feasibilities are often based on pricing that no longer reflects current conditions. When fuel, freight and materials move together, early budgets can fall out of alignment before construction even begins. In many cases, those increases don’t disappear — they flow through land values, building costs, or both, tightening margins further down the line.

There’s also a contractual risk. Many industrial projects are still delivered under fixed‑price arrangements, where builders carry the exposure to cost increases that they can’t control. We saw this play out during COVID. The difference now is that costs were already elevated and buffers are thinner. That makes pricing shocks more immediate and harder to absorb.

Importantly, there’s been no direct policy relief aimed at how construction contracts respond to this level of volatility. While fuel excise changes may ease some pressure, they don’t materially change the risk profile for long‑lead, energy‑intensive packages. The result is increased exposure to cost escalation, programme risk, or both.

In this environment, waiting to commit doesn’t preserve flexibility. It increases uncertainty. Projects that proceed on the assumption that pricing will stabilise risk are being forced into reactive decisions later, often with fewer options and higher costs.

What should clients be doing to manage cost?

What we’re seeing clients do is lock in the packages most exposed to fuel and freight movement and align cashflow early enough to secure pricing and production slots. Early engagement matters — when contractors are involved sooner, there’s more opportunity to plan procurement, confirm availability and make decisions before costs move again. It also helps protect programme and reduce the risk of delays later.

Lock it in now

In this environment, waiting creates risk. Acting early creates certainty.

If you’re in feasibility or early design, talk to Akura about our ‘Lock It In’ offer — we’ll help you identify what can be secured early to protect cost and programme.