Temporary fuel cost escalation measures

Recent global supply disruptions have caused short term volatility in fuel prices.

To support continuity and consistency, the Department of Logistics and Infrastructure (DLI) is applying temporary measures to how fuel related price adjustments are calculated.

For eligible DLI contracts, price adjustments will be applied:

• monthly, instead of quarterly or annually
• using published fuel indices to reflect short term movements
• with quarterly reconciliation once Australian Bureau of Statistics (ABS) indices are released.

Eligibility

These measures apply to eligible DLI contracts where invoices were approved and paid during March, April and May 2026.

Standard contract provisions will resume from June 2026, unless further direction is provided.

There is no change to contract risk allocation or entitlement. Some individual DLI contracts already specify fuel percentage allocations. These allocations are not increased under the temporary arrangements.

What contractors need to do

You do not need to do anything additional to receive the price adjustment.

Adjustment payments will be managed by DLI through existing contract variation processes.

Where temporary relief applies, DLI will calculate the adjustment for invoices paid in the relevant month and will process the payment through existing vendor details.

This ensures no additional work for industry.

Payment dates

Adjustments are based on the month an invoice is paid, not the month the work was completed.

Submitted invoices require superintendent certification of completed work before being approved for payment in accordance with the contract. Temporary fuel adjustments are calculated separately based on invoices paid.

DLI will retrospectively calculate adjustments for invoices already paid in March and April and include them in the scheduled payment runs.

How the fuel adjustment is calculated

Some individual DLI contracts already specify fuel percentage allocations. These allocations are not increased under the temporary arrangements.

For contracts without a fuel percentage allocation, the published fuel indices will be applied to a 10% fuel component of the invoice.

Benefit

The temporary measures are designed to:

• help sustain industry capacity
• reduce administration impost on industry
• ensure responsible use of taxpayer funds
• provide a temporary, targeted and fair approach
• use established contract mechanisms supported by strong governance.

The Northern Territory Government will continue to monitor market conditions and provide further advice should impacts extend beyond the temporary period.

Resources

Factsheet for contractors PDF (450.7 KB)