By Theo Loxley 
Published: 26 March 2026

This week, Australians watched fuel prices climb to levels not seen in the nation’s history. Unleaded petrol has surged past $2.36 per litre nationally. Diesel has topped $2.80. In parts of Sydney, some stations have reportedly charged over $3.00. The Middle East conflict and the ongoing disruption to shipping through the Strait of Hormuz have created a supply shock that is hitting every corner of the economy.

But something far more serious is happening beneath the surface and almost nobody is talking about it.

Across the country, the fuel crisis is quietly dismantling the systems that deliver disability care and community health services to the people who need them most. NDIS providers, allied health professionals, and disability support workers are being forced to make impossible decisions: absorb crippling cost increases, reduce services, or walk away entirely.

This is not a future risk. It is happening right now.

The current spike in fuel prices has been triggered by the escalating conflict between the United States, Israel, and Iran, which has led to the effective closure of the Strait of Hormuz a shipping lane through which roughly one-fifth of the world’s fuel supply flows during peacetime. Iranian naval operations have disrupted tanker movements, and six oil shipments bound for Australia in April have reportedly been turned back or deferred.

The impact on Australian consumers has been swift and severe. According to FuelRadar’s weekly report for the week ending 22 March, the national average for unleaded 91 reached 236.54 cents per litre, with diesel hitting 280.04 cents per litre. Adelaide saw one of the steepest weekly jumps at nearly 10 per cent. The ACCC confirmed average retail petrol prices across the five largest cities had reached 240.2 cents per litre as of mid-March.

Panic buying has intensified the crisis. Demand spiked by up to 50 per cent in some regions, emptying hundreds of service stations. In New South Wales alone, over 100 stations ran out of diesel. Regional Queensland, Western Australia, and Victoria have experienced similar shortages, with independent fuel retailers bearing the worst of the supply constraints.

The federal government has responded by releasing 762 million litres from domestic reserves, temporarily relaxing fuel quality standards for petrol, and launching an ACCC enforcement investigation into potential anti-competitive conduct affecting regional diesel supply. Despite these measures, diesel terminal gate prices surged from roughly $1.50–$1.60 to between $2.94 and $2.99 across key capital cities by 24 March.

For most Australians, this is a cost-of-living story. For the healthcare and disability sectors, it is becoming something far more consequential.

Australia’s disability care and community health systems depend on mobility. Unlike hospital-based care, NDIS services and allied health supports are delivered where participants live in homes, community centres, schools, and workplaces. Every appointment requires a provider to travel, often across significant distances.

This model has always carried costs. But the current fuel crisis has turned a manageable expense into an existential threat for many providers, particularly those operating in regional, rural, and remote areas.

Under the NDIS Pricing Arrangements and Price Limits for 2025–26, providers can claim non-labour travel costs at $0.97 per kilometre for a standard vehicle. This rate, based on ATO reasonable travel allowances, is designed to cover fuel, maintenance, insurance, and depreciation. The ATO’s own cents-per-kilometre rate is set at 88 cents for the current financial year.

These rates were calculated in a different economic environment. When diesel was $1.50 per litre, the per-kilometre reimbursement broadly covered running costs. With diesel now approaching $3.00 per litre, the fuel component alone has nearly doubled — but the NDIS reimbursement rate has not changed.

The result is a widening gap between what it actually costs to deliver a home visit and what a provider can recover. For detailed analysis of how NDIS pricing structures affect provider viability, see TherapyInsights’ guide to NDIS support categories and funding.

NDIS price limits set the maximum that registered providers can charge participants. These limits are typically reviewed annually, with the current schedule effective from November 2025. They were not designed to accommodate fuel price shocks of this magnitude or speed.

Therapy providers can claim up to $92.00 per hour for travel time, capped at 30 minutes each way in metropolitan areas and 60 minutes in regional zones. But the per-kilometre non-labour cost the line item that covers actual fuel and vehicle expenses remains fixed regardless of what is happening at the bowser.

This means every provider absorbs the difference. And for many, particularly sole traders and small practices, that difference is now unsustainable.

Australia’s geography compounds the issue. A therapist in inner-city Melbourne might drive 10 kilometres between appointments. A therapist in regional Western Australia might drive 80 or more. The NDIS Modified Monash Model recognises remoteness by extending travel time caps, but the fundamental economics still work against providers in spread-out service areas.

When fuel costs spike, the providers serving the most geographically isolated and often most vulnerable participants are hit hardest.

Consider an occupational therapist based in Bunbury, Western Australia, who travels to participants’ homes across a 120-kilometre radius covering towns like Busselton, Collie, and Harvey. On a typical day, she drives 160 kilometres across three to four appointments.

At the NDIS rate of $0.97 per kilometre, she claims $155.20 for 160 kilometres. Six months ago, when diesel sat around $1.65 per litre, her vehicle (consuming roughly 8 litres per 100 kilometres) cost about $21.12 in fuel alone. Today, with diesel at $2.80, the same journey costs $35.84 in fuel an increase of 70 per cent.

But fuel is only part of the equation. Vehicle servicing intervals shorten with high mileage. Tyre replacement costs have increased alongside rubber import prices. Insurance premiums have risen. The $0.97 rate was tight before the crisis. Now it leaves almost nothing after actual expenses.

A disability support worker in outer suburban Brisbane travels 80 kilometres per day providing in-home assistance to four NDIS participants. She uses her own car and fills up three times a week.

Three months ago, filling her 50-litre tank cost roughly $85. Today, the same fill costs $140. That is an additional $165 per week in fuel alone over $8,500 per year that she cannot fully recover through NDIS billing.

Her employer is a small registered NDIS provider with 12 staff. The business is now spending an additional $4,000 per month on fuel-related costs across its workforce. With NDIS price limits unchanged, this comes directly off the bottom line. The provider is considering reducing the number of home visits per day to cut fuel expenditure which means participants receive less support.

A physiotherapy practice in Townsville delivers outreach services to NDIS participants in surrounding communities, some more than 100 kilometres away. The practice employs three mobile therapists.

Before the fuel crisis, each outreach visit generated a modest margin after travel costs were accounted for. At current diesel prices, the practice estimates it is losing between $15 and $25 on every remote visit once fuel, vehicle wear, and unpaid travel time are factored in. Over a month, the accumulated loss on outreach alone exceeds $3,000.

The practice is now actively considering withdrawing outreach services from its most distant communities. The participants in those communities have no alternative local provider.

For a broader examination of how rising costs are affecting vulnerable Australians’ access to care, see TherapyInsights’ analysis of the cost-of-living crisis and healthcare access.

The financial pressure on NDIS providers and allied health businesses is not simply about fuel prices. It is about the structural gap between fixed reimbursement rates and volatile operating costs.

There are several layers to this problem.

First, fuel itself. When diesel moves from $1.60 to $2.80 per litre, the fuel cost per kilometre for a standard vehicle (at approximately 8L/100km) rises from around 13 cents to 22 cents. For a provider driving 200 kilometres in a day, that is an additional $18 in fuel alone every day, unrecoverable under current pricing structures.

Second, vehicle wear and tear. Increased driving accelerates maintenance schedules. Tyres, brakes, oil changes, and general servicing all cost more when kilometres accumulate quickly. These costs are embedded in the NDIS per-kilometre rate, but that rate was set before the current inflationary environment.

Third, unpaid travel time. While NDIS rules allow providers to claim for travel time, the caps are strict. A therapist travelling 50 minutes each way to a regional participant can only claim 30 minutes in metropolitan areas. The remaining 20 minutes is uncompensated. That lost time compounds across a full week of appointments.

Fourth, opportunity cost. Every hour spent driving is an hour not spent delivering billable services. When travel takes longer or becomes more expensive, providers face pressure to reduce their service footprint seeing fewer participants across a smaller area. This is not a theoretical concern. It is a rational business response to unsustainable cost structures.

TherapyInsights has previously examined the direct impact of rising fuel costs on NDIS service delivery, and the dynamics described then have now significantly worsened.

The consequences of this financial pressure do not stay within provider balance sheets. They flow directly to participants and patients.

When providers reduce outreach, participants miss appointments. When appointments are missed, therapy plans stall. When therapy plans stall, conditions deteriorate. For people with disabilities and chronic health conditions, even short gaps in service can have compounding effects.

Missed physiotherapy sessions for a participant recovering from surgery can extend recovery timelines by weeks. Delayed occupational therapy for a child with developmental needs can affect school readiness. Reduced support worker visits for a person with complex care needs can lead to avoidable hospitalisations.

The NDIS was built on the principle that early and consistent intervention produces better long-term outcomes and lower long-term costs. The fuel crisis is undermining that principle in real time, not through policy failure, but through economic pressure that the system was never designed to absorb.

For participants in outer suburban and regional areas, the risk is acute. These are communities where provider choice is already limited, where waitlists are already long, and where a single provider withdrawal can leave dozens of participants without access to essential supports.

The fuel crisis is not hitting all communities equally. The disproportionate impact on rural and regional Australia is creating a two-tiered system of healthcare access that risks becoming entrenched.

In metropolitan areas, providers can cluster appointments geographically. Travel distances are shorter, public transport alternatives exist for some staff, and the density of participants makes route optimisation possible. The fuel cost increase is painful, but manageable for many urban providers.

In regional and remote areas, none of these advantages apply. Providers drive longer distances between fewer participants. Alternative transport is non-existent. The economics that were already marginal have tipped into the red.

The risk is not abstract. When a provider withdraws from a regional community, they leave behind participants who may have no other option. There is no neighbouring practice 10 minutes away. There is no waitlist to join. There is simply a gap in service that may not be filled.

Healthcare professionals have already raised the alarm. Doctors for the Environment Australia published an open letter earlier this month, with one rural GP stating that a colleague spent several hours searching for a petrol station that actually had fuel. That is the reality of rural healthcare delivery in March 2026.

As fuel costs continue to rise, the quiet truth is becoming harder to ignore: in Australia today, your postcode increasingly determines your access to care.

What many policymakers do not yet fully appreciate is that the NDIS pricing framework was designed for a period of relative economic stability. Annual price reviews assume gradual cost increases. They do not accommodate supply shocks that double a major input cost within weeks.

The system was not designed for this level of cost pressure. NDIS price limits were calibrated on the assumption that fuel would remain within a predictable range. There is no mechanism for emergency adjustment when external shocks fundamentally alter the cost base of service delivery.

This creates a structural vulnerability. The government can release strategic fuel reserves and relax quality standards as it has done. It can investigate anti-competitive conduct in fuel distribution. But none of these responses address the specific transmission mechanism that is damaging healthcare delivery: the gap between fixed NDIS reimbursement rates and the real cost of getting a therapist or support worker to a participant’s door.

The NDIA’s own guidance acknowledges that therapy travel costs are draining participant funding faster than expected. Updated travel claiming rules introduced from July 2025 were intended to encourage more efficient scheduling. But efficiency gains cannot offset a 70 per cent increase in fuel costs.

The disconnect between macro-level crisis response and sector-level impact is where participants are falling through the cracks.

Based on current trends and sector dynamics, several outcomes are becoming increasingly likely.

Provider exits from regional markets. Many providers are now reassessing whether they can continue delivering services under current conditions. If diesel remains above $2.50 per litre through the second quarter, expect to see small and mid-sized providers withdraw from their most cost-intensive service areas. The participants left behind will enter an already strained market looking for alternatives that may not exist.

Service rationing by stealth. Providers who remain will adjust their operating models. This means fewer home visits per week, tighter geographic boundaries, and prioritisation of participants who are closer and cheaper to reach. This is not a formal policy change it is an economic reality that will reshape access patterns without any official announcement.

Accelerated telehealth adoption. The fuel crisis will push more providers toward telehealth and remote service delivery, particularly for capacity-building supports that do not require physical presence. While telehealth has clear value, it is not suitable for all NDIS supports particularly those involving physical therapy, home modifications, or direct personal care. Over-reliance on remote delivery risks reducing the quality of support for participants who need hands-on assistance.

Growing waitlists and delayed care. As provider capacity contracts, participants will face longer wait times for initial assessments, plan reviews, and ongoing therapy. In a system already challenged by workforce shortages, the fuel crisis adds another layer of constraint that will be felt most acutely by those with the greatest need.

The fuel crisis dominating headlines this week is a story about global conflict, shipping disruptions, and petrol prices. That story is real and important.

But underneath it lies a quieter crisis that affects some of the most vulnerable people in Australia. The systems designed to deliver disability care and community health services are buckling under cost pressures they were never built to withstand. Providers are losing money. Services are being cut. Participants are losing access.

None of this requires a policy failure to explain. It is the predictable consequence of a system with fixed reimbursement rates meeting a world of volatile input costs. The question is not whether this is happening it is. The question is how long it will continue before it receives the attention it demands.

The fragility of Australia’s disability care system has been exposed not by a policy scandal or a funding cut, but by the price of diesel. And until the structural gap between what it costs to deliver care and what the system pays for it is addressed, the most isolated and vulnerable Australians will continue to pay the price.

This is already happening. It is just not being widely reported.

About Theo Loxley
Theo Loxley is a healthcare journalist and contributor to TherapyInsights, where he covers breaking developments across the NDIS, aged care, and Australia’s evolving health system. His reporting focuses on the real-world impact of policy, funding changes, and economic pressures on providers, frontline workers, and vulnerable communities. Theo is known for translating complex healthcare issues into clear, accessible insights that inform decision-makers and everyday Australians alike..