Middle East War: Panic buying risks depleting diesel stocks for trucking firms

Thursday, 12 March 2026

The trucking industry has few options to deal with escalating diesel prices due to the war in Iran, and most will pass on the cost to their customers. Not doing so is a road to business closure, Transporting NZ head Dom Kalasih says.

Realistically, there are not many alternatives, Kalasih said.

Transport customers have recognised the difficulty and risks that higher fuel prices pose for trucking firms, and have pro-actively said they would pay the extra cost, he said.

But supply of diesel was a concern. Four days ago there was about 50 days of diesel stock, but that was rapidly depleting with panic buying, which was also pushing prices up, “almost unnecessarily”, he said.

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There had been unhelpful warnings of petrol potentially hitting $4, while a transport industry group declared the situation a crisis, he said.

“But if you look at what the price of crude has been before, it had actually been much higher — and the world got through.”

Transport companies that either could not recoup the cost of higher fuel prices from customers, or found it difficult to do so, would be under considerable financial strain.

Many trucking firms used a contractual mechanism with customers to adjust rates according to the ups and downs of fuel prices.

Some animal processing plants had proactively gone to their transport operators, assuring them that they would pay the increase, “because the cost has to be passed on”, Kalasih said.

Fuel made up about 15% of operating costs for transport companies. A 25% increase in fuel cost equated to a 4% increase in transport operating costs.

“This is a low margin game, and some of the margins are probably in the order of 4% to sort of 8%.” So a 4% transport cost increase that was not passed on meant the operator was working for nothing.

“There'll be some customers that don't want to pay. But at the end of the day, this just has to pass on. People still want goods on the shelves,” Kalasih said.

There was little that the industry could do in the short term to improve the viability of the sector, he said.

Hydrogen diesel hybrid trucks, already on the road, could save up to 30% in diesel use.

Trucks powered by hydrogen fuel cells was less likely at the moment, as was battery electric powered trucks, mainly because of their high weight.

The sector was working with the Government to get more productive trucks on the road that relied less on fossil fuels. The war in the Middle East and the impact on fuel prices was a reason to advance alternative fuels, Kalasih said.

“Despite the minister's claims in middle of last year about unlocking productivity, we just haven't been able to get any real momentum or substantive progress in that space. And it's that's very frustrating,” he said.