Published: 26 March 2026  |  Author: Therapy Insights Editorial Team

Australian fuel prices have surged past $2.36 per litre for unleaded and $2.80 for diesel as of late March 2026, driven by the ongoing Middle East conflict and disruption to global shipping lanes. The immediate consequences are visible: fuel rationing discussions, service station shortages, and household budgets under extreme strain. NDIS providers, already operating on constrained margins, are absorbing costs that the scheme’s pricing framework was never designed to accommodate.

But the real issue is not fuel, it’s what fuel has revealed.

The NDIS pricing model does not reflect real service delivery costs. It did not reflect them before the crisis, and the crisis has simply made the gap impossible to ignore. What providers are now experiencing is not a temporary disruption. It is the exposure of a structural misalignment between what the scheme pays and what it actually costs to deliver care a misalignment that has been building for years and now threatens NDIS provider sustainability at scale.

The NDIS operates under a regulated pricing framework known as the Pricing Arrangements and Price Limits (PAPL), updated annually through the NDIA’s Annual Pricing Review. The PAPL sets maximum hourly rates that registered providers can charge for specific services. Plan managers are bound by the same caps. Only self-managed participants can negotiate rates above these limits and even then, spending must align with their plan goals.

For therapy services, the 2025–26 PAPL sets the following indicative hourly price limits: physiotherapy at $183.99, occupational therapy at $193.99, speech pathology at $193.99, and psychology at $232.99. These figures represent the maximum a provider can charge for one hour of face-to-face service delivery in a metropolitan area.

Travel is treated separately. From 1 July 2025, the NDIA introduced a significant change: therapy providers can now only claim 50 per cent of their hourly rate for time spent travelling to a participant. A physiotherapist with a rate of $183.99 per hour can claim a maximum of $92.00 per hour for travel. In metropolitan areas, claimable travel time is capped at 30 minutes per trip. In regional areas, the cap extends to 60 minutes. Non-labour travel costs fuel, tolls, parking can be claimed separately at up to $0.99 per kilometre, with the participant’s prior agreement.

These rates are derived from the NDIS Disability Support Worker Cost Model and, for therapy, from analysis of over 10.5 million therapy transactions. The intent is to ensure participants receive value for money while maintaining a functioning provider market. The question is whether the model achieves both objectives simultaneously.

The NDIS price limit represents the maximum revenue a provider can earn per billable hour. It does not represent net income. The gap between the two is where NDIS funding issues begin.

To deliver one billable hour of therapy, a provider incurs costs across multiple categories. Staff wages constitute the largest component, typically consuming 70 to 82 per cent of revenue according to industry reporting. The SCHADS Award, which governs wages for allied health and disability support workers, increased by 3.75 per cent in 2025. The NDIS price guide indexation for the same period was 3.19 per cent. That 0.56 percentage point gap may appear small in isolation, but for a provider with $2 million in annual revenue and 70 per cent labour costs, it translates to approximately $7,840 per year in unfunded wages — with no mechanism to recover it.

Beyond wages, providers absorb vehicle running costs (fuel, insurance, registration, maintenance), administrative overhead (compliance documentation, progress notes, incident reporting, quality audit preparation), professional development, clinical supervision, software and billing systems, and the non-billable time that is inherent to every service interaction case notes, report writing, care coordination, and communication with families and other providers.

National Disability Services data indicates that medium-sized providers spend 18 to 22 hours per week on compliance-related administration alone. At $40 per hour, that represents $37,440 to $45,760 per year in overhead before a single billable hour is delivered. Industry analysis suggests that NDIS providers now spend 25 to 35 per cent of their operational time on tasks that generate no direct revenue.

The result is that a typical provider managing 15 to 30 participants operates on margins of 5 to 12 per cent. For many, margins are thinner still. Over 55 per cent of NDIS providers reported operating at a loss in 2023–24, according to the NDIS Provider Outlook Report.

Understanding true service delivery costs is becoming essential for providers navigating the current environment. The following scenarios illustrate the financial reality of delivering NDIS-funded therapy in March 2026.

Scenario 1: Metropolitan Physiotherapist (Mobile)

A physiotherapist delivers a one-hour in-home session to a participant 20 minutes from their clinic. At the 2025–26 price limit of $183.99 per hour, the session generates $183.99 in revenue. Travel time of 20 minutes, claimed at 50 per cent of the hourly rate ($92.00/hour), adds $30.67. Non-labour vehicle costs at $0.99 per kilometre for a 30-kilometre round trip add $29.70. Total claimable revenue: $244.36.

Against this, the provider pays the therapist’s wage (including superannuation at 11.5 per cent and on-costs), which on a per-session basis typically runs $110 to $130 for an experienced clinician. Vehicle costs at current fuel prices ($2.36/litre, vehicle consuming 9L/100km for 30km) amount to approximately $6.37 in fuel alone, plus insurance, registration, and maintenance amortised per trip. Add 20 minutes of case notes (unbillable), administrative processing, and a proportion of clinic overheads (rent, software, compliance). Total estimated cost to deliver: $200 to $230. Net margin: $14 to $44 per session. At four mobile sessions per day, the provider generates $56 to $176 in daily margin before tax from which the business must fund growth, contingency, and non-clinical staff.

Scenario 2: Regional Speech Pathologist

A speech pathologist in a regional area (MMM 4–5) travels 45 minutes each way to deliver a one-hour session. The session rate is $193.99. Travel time of 45 minutes at 50 per cent ($97.00/hour) yields $72.75 per trip, or $145.50 for the return journey. Non-labour costs for an 80-kilometre round trip at $0.99/km add $79.20. Total claimable: $418.69.

However, the therapist’s time commitment is 2.5 hours (45 minutes each way plus one hour of service). The therapist must be paid for the full 2.5 hours, not just the one billable hour. At a loaded hourly cost of $65 to $75 (including super and on-costs for an employed clinician), that’s $162.50 to $187.50 in wages alone. Fuel for 80 kilometres at $2.80/litre diesel in a regional vehicle consuming 10L/100km costs $22.40. Add case notes, admin, and overhead allocation. Total estimated cost: $280 to $320. Net margin: $99 to $139 per session. This appears viable until you account for the fact that the therapist could have delivered 2.5 clinic-based sessions in the same time, each generating $193.99 with no travel cost. The opportunity cost of regional mobile delivery is significant.

Scenario 3: Rural Occupational Therapist (Remote Area)

An OT in a remote area (MMM 6–7) travels 90 minutes each way to a participant. Remote loadings of 40–50 per cent apply, lifting the effective session rate to approximately $271.59 to $290.99. Travel is not subject to time caps in remote areas but is still claimed at 50 per cent of the loaded rate. For three hours of travel time, travel revenue is approximately $203.69 to $218.24. Non-labour costs for a 200-kilometre round trip at $0.99/km: $198.00. Total claimable: approximately $673 to $707.

The therapist’s total time commitment is 4 hours (3 hours travel, 1 hour service). Wage cost for 4 hours at loaded rates: $260 to $300. Fuel for 200 kilometres at $2.80/litre: $56.00. Vehicle wear on unsealed regional roads accelerates maintenance costs. Add admin, notes, and overhead. Total cost: $420 to $480. Net margin: $193 to $287. The margin exists but the therapist has consumed an entire half-day for one session, limiting daily throughput to two participants at most. Any cancellation eliminates the margin entirely and may result in a net loss for the day.

Fuel is not the cause of NDIS pricing pressure. It is the stress test.

The structural gap between NDIS price limits and real delivery costs has been present since the scheme’s inception. For years, providers absorbed incremental cost increases wage rises, insurance premiums, compliance requirements, software costs through efficiency gains, longer working hours, or simply thinner margins. The system appeared functional because external conditions were relatively stable.

The fuel crisis of early 2026 removed that stability. When unleaded prices rose 40 per cent and diesel surged by a similar magnitude in the space of weeks, the cost base shifted faster than any provider could absorb. NDIS travel costs, already a point of contention following the July 2025 travel claiming changes, became acutely uneconomic for mobile and regional providers. The margin buffer, such as it was, disappeared.

As Therapy Insights reported in its analysis of the fuel crisis and disability providers, the combination of rising fuel costs and capped reimbursement rates has placed some providers in a position where delivering services costs more than the scheme pays a mathematically unsustainable condition.

The NDIS pricing model is built on a set of assumptions that increasingly diverge from operating reality.

First, it assumes cost stability. The PAPL is reviewed annually, with adjustments typically reflecting wage index movements and CPI data from the preceding year. This creates an inherent lag. When costs rise sharply within a financial year as they have with fuel in early 2026 the pricing framework has no mechanism for mid-cycle adjustment. Providers bear the full risk of cost volatility between annual reviews.

Second, it assumes efficient travel. The 50 per cent travel cap introduced in July 2025 was designed to ensure travel costs remain proportionate to service delivery. In a metropolitan area with dense participant populations, this is a reasonable expectation. In regional and rural areas, where a single session may require hours of driving, the assumption breaks down. The model effectively penalises geography providers servicing dispersed populations receive proportionally less revenue per hour of total work committed.

Third, it assumes a stable operating environment. The cost model underlying NDIS pricing reflects the cost structures of what the NDIA describes as ‘efficient providers.’ But efficiency is not a fixed state. It shifts with fuel prices, labour markets, regulatory requirements, and technology costs. A provider that was efficient at $1.70-per-litre fuel is not necessarily efficient at $2.80. The model does not account for this.

The result is a pricing framework that works in theory under stable conditions but fails under stress precisely when providers and participants most need it to hold.

The consequences for providers are measurable and accelerating.

Provider economics are not an abstract concern. They translate directly into participant access.

When providers contract their service areas, participants in those areas lose options. When providers exit the market, waitlists grow. When the remaining providers are stretched thin, appointment availability decreases and the quality of service delivery comes under pressure.

As Therapy Insights has documented, the fuel crisis is already driving behavioural change among healthcare consumers, patients delaying appointments, reducing session frequency, and disengaging from care entirely. On the provider side, the same crisis is reducing the supply of available services. The convergence of falling demand and falling supply does not produce equilibrium. It produces a contraction in the total volume of care delivered a net loss for participants and the system.

Early NDIA data suggests some participant plans are shrinking by 15 to 25 per cent, particularly in therapy and support coordination. For participants whose providers have exited or reduced availability, the funding in their plan may be adequate on paper but inaccessible in practice.

The pricing model’s limitations are most acute in regional and rural Australia.

Remote loadings of 40 to 50 per cent partially offset higher costs, and the removal of travel time caps in MMM 6–7 areas acknowledges the distances involved. But these adjustments do not fully compensate for the reality of service delivery in areas with low population density, limited provider presence, and long travel distances over roads that impose higher vehicle maintenance costs.

A provider in a regional centre who travels 100 kilometres to deliver a one-hour session commits three or more hours to a single participant interaction. The revenue generated must cover the therapist’s full working time, fuel at current prices, vehicle costs, and all associated overheads. In many cases, it does not, or it does so only if every scheduled session proceeds without cancellation.

The model penalises geography. Providers servicing rural participants are structurally disadvantaged relative to their metropolitan counterparts, and the fuel crisis has amplified this disadvantage significantly. The ACCC’s reporting of regional fuel station shortages adds a further dimension: in some areas during March 2026, the question was not just cost but whether fuel was available at all.

As broader cost-of-living analysis has identified, vulnerable Australians in regional areas face a compounding set of pressures that the current NDIS pricing structure is not equipped to address.

The challenge facing the NDIS is not unique to disability services. It is a structural feature of any regulated pricing system that sets rates based on historical cost data.

Annual pricing reviews, by design, reflect the cost environment of the preceding period. They capture wage movements, CPI data, and market analysis from months or quarters past. In stable economic conditions, this lag is manageable. In volatile conditions, rapid fuel price spikes, geopolitical supply disruptions, sharp inflationary movements, the lag becomes a gap, and the gap becomes a risk.

Fixed pricing in a volatile cost environment transfers risk from the funder to the provider. The NDIA sets a ceiling on revenue while having no corresponding mechanism to set a ceiling on costs. Providers are expected to operate within this framework regardless of whether external conditions make it economically feasible to do so. The implicit assumption is that providers will find efficiencies to absorb cost shocks. When those efficiencies are exhausted, the only remaining options are reduced service quality, reduced service volume, or exit.

The NDIA’s decision to open the 2025–26 Annual Pricing Review consultation in late 2025 with a commitment to a three-year pricing work plan represents an acknowledgment that the current cycle requires reform. But annual reviews, however well-informed, cannot respond to the kind of cost volatility Australia experienced in early 2026. The sector would benefit from a mechanism for mid-cycle adjustment linked to objective external triggers fuel price thresholds, CPI movements, or significant supply chain disruptions, that activates automatically without requiring a full review cycle.

If the pricing model is not adjusted to account for current cost realities, several outcomes are probable.

Continued provider exits. The 21 per cent annual exit rate will accelerate, particularly among smaller providers and those servicing regional areas. The backbone of community-based disability support providers managing 50 or fewer participants is already shrinking. Further margin compression will push more operators past the point of viability.

Market consolidation. As smaller providers exit, larger organisations with greater capacity to absorb cost pressures and invest in operational efficiency will gain market share. This is not inherently negative, but it reduces participant choice and may concentrate service delivery in areas of higher population density, further disadvantaging rural participants.

Reduced service availability. Fewer providers means longer waitlists, wider service gaps, and reduced geographic coverage. Participants in areas already underserviced will face the sharpest decline. The NDIA’s own data recognises that in some regions, provider density is well below the level required for meaningful participant choice.

Increased reliance on telehealth. Telehealth eliminates travel costs entirely and will become an increasingly attractive option for both providers and participants. For many therapy types psychology, support coordination, some speech pathology services this is a viable and effective modality. For hands-on therapies such as physiotherapy, occupational therapy assessments, and disability support that requires physical presence, telehealth is not a substitute. The risk is that economic pressure, rather than clinical suitability, drives modality selection.

It would be incomplete to frame this analysis without acknowledging the constraints the NDIA operates within.

The NDIS is a $44.7 billion scheme representing 1.7 per cent of GDP. Its cost growth trajectory which peaked at 23 per cent annually in 2021–22 and has since decelerated to approximately 10 per cent has been a legitimate source of fiscal concern. The National Cabinet’s growth target of 8 per cent by July 2026 reflects a bipartisan commitment to scheme sustainability. Unchecked cost growth threatens the long-term viability of the NDIS itself, which serves 739,000 active participants.

Price limits exist to protect participants from excessive charging and to ensure the scheme remains fiscally sustainable. The NDIA’s analysis of 10.5 million therapy transactions in the most recent pricing review represents a genuine effort to ground pricing in market data rather than arbitrary benchmarks. The three-year pricing work plan announced for 2026 signals an intent to move toward more structured, evidence-based pricing reform.

The challenge is not that the NDIA lacks awareness of cost pressures. It is that the mechanisms available to respond are too slow for the speed at which costs are currently moving. Balancing fiscal sustainability with provider viability is not a binary choice — but it requires a pricing framework flexible enough to reflect real-world conditions in something closer to real time.

The fuel crisis of early 2026 did not break the NDIS pricing model. It revealed fractures that were already present.

The gap between price limits and delivery costs is not a grievance. It is a measurable, documented economic reality that is driving provider exits, reducing service availability, and placing participant access under increasing pressure. The 50 per cent travel cap, the annual review lag, and the absence of a mid-cycle adjustment mechanism are specific, identifiable features of the pricing framework that exacerbate the problem under volatile conditions.

None of this is insurmountable. The NDIA has the data, the review infrastructure, and the stated commitment to pricing reform. What is needed is a willingness to act at a pace that matches the speed of change in the external environment and an acknowledgment that provider sustainability is not a competing interest to participant outcomes, but a precondition for them.

The question is no longer whether the model is under pressure but whether it can continue to function under current conditions.

About Theo Loxley
Theo Loxley is a healthcare journalist at TherapyInsights covering NDIS, aged care, and the real-world impact of policy on Australian health services.

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