Australian SMEs absorb rising fuel costs, MYOB says

Australian small and medium-sized businesses recorded a 35% year-on-year rise in fuel spending in March, according to MYOB, with most firms still absorbing the extra cost rather than raising prices.

Its latest Business Monitor found fuel had become the biggest single cost pressure for SMEs, with 50% of respondents reporting a high level of impact. Utilities followed at 44%, while 37% cited interest rates.

Only 35% of businesses increased prices in the past six months, while 65% absorbed the impact. This suggests many operators believe customers remain highly sensitive to price rises.

Analysis of anonymised customer transaction data also suggested businesses are managing fuel spending more actively. As prices rose, firms refuelled nearly 15% more often, suggesting tighter day-to-day control over fuel purchases.

Sector impact

The sharpest increases were concentrated in industries that rely heavily on vehicles and logistics. Retail trade posted a 53% rise in fuel spending in March, while transport, postal and warehousing recorded a 33% increase.

Less fuel-intensive sectors saw smaller changes. Financial services recorded an 18% increase over the same period, highlighting the gap between goods-moving businesses and office-based industries.

April figures showed the pressure spreading more widely across the economy. Construction recorded a 47.9% increase in fuel spending, and transport, postal, and warehousing rose 47.2%.

Professional, Scientific & Technical Services, which includes many white-collar firms, saw a 44.7% increase in April. Accommodation & Food Services rose 39.7%, showing that higher fuel costs were no longer confined to sectors with obvious freight exposure.

Retail trade, which had seen one of the steepest rises in March, cooled to 7.1% in April from 52.8% a month earlier. MYOB attributed much of the earlier jump to bulk fleet-card invoices that did not recur.

Financial Services and Electricity, Gas & Water remained among the least-affected sectors in April, with increases of 2.5% and 3.1%, respectively. The average transaction size rose 21.1% year on year in April, up from 19% in March, suggesting pump prices continued to climb even as some demand effects moderated.

EV shift

Alongside the rise in fuel bills, businesses and employees were showing greater interest in electric vehicles through novated leasing. Data from Flare HR, part of MYOB, showed that battery-electric vehicles accounted for 81% of total vehicle orders in March, up from 57% in February and about 45% in the fourth quarter of the previous financial year.

EV enquiries also nearly doubled from the previous four-week period. The figures suggest higher running costs are feeding into decisions about fleet and salary-packaging arrangements.

The Federal Government's Fringe Benefits Tax exemption for EVs has also contributed to that shift by lowering the cost of novated leases. For employers and workers facing higher transport costs, the tax treatment has made electric vehicles a more viable alternative to petrol and diesel models.

Paul Robson, Chief Executive of MYOB, said the data reflected a broader rethink among businesses and households as transport costs rise.

"Rising fuel costs are forcing small business owners to rethink how they operate and where every dollar goes," Robson said.

"We're seeing businesses and households looking at ways to reduce pressure, including considering alternatives such as electric vehicles to bring running costs down.

"Supportive policy settings, such as the FBT exemption for EVs, can help ease immediate cost pressures and accelerate a shift to more sustainable, cost-effective ways of operating."

The MYOB analysis was based on customers who made fuel purchases in both March 2025 and March 2026, with cohorts normalised to reduce the effect of changes in revenue or employee numbers. It compared the value and frequency of fuel transactions across the two periods.

The figures add to signs that cost inflation is being felt unevenly across the SME economy, with diesel-reliant sectors under the heaviest strain while service industries also face higher transport-related costs.

In April, the average fuel transaction size was 21.1% higher than a year earlier.