Rising Fuel Costs and Supply Chain Pressures: Impacts on Australia’s Pavement Recycling and Stabilisation Sector
The Australian Pavement Recycling and Stabilisation Association (AustStab) issues this statement to advise members, road authorities, particularly local government, and industry stakeholders of the escalating cost pressures and emerging supply risks affecting the pavement recycling and stabilisation sector.
At the same time, AustStab emphasises that this environment presents a critical opportunity to rethink how road infrastructure is delivered across Australia.
The Australian road network is a critical national asset, underpinning the movement of people, freight, emergency response and essential services across the country. The work undertaken by the pavement recycling and stabilisation sector is fundamental to maintaining these networks as safe, operational and resilient.
In any environment of supply constraint or potential fuel disruption, the ability to maintain and restore road networks must be recognised as an essential service.
The Australian road network is at a tipping point.
Rapid escalation in fuel, bitumen and material costs is placing unprecedented pressure on already constrained road authority budgets. Expectations on performance, resilience and network coverage continue to grow, yet the purchasing power of those budgets is declining in real time.
Continuing to deliver infrastructure using traditional approaches will not meet this challenge. When costs rise, doing the same thing delivers less.
Pavement recycling and stabilisation provide a proven, immediate and scalable pathway for asset owners to do more with the resources they have.
AustStab Position: Supporting Asset Owners Through Cost Escalation
AustStab and its members are committed to supporting asset owners through this period of cost escalation and supply uncertainty.
We encourage road authorities and asset owners to actively review current and planned delivery models, and to consider pavement recycling and stabilisation as first-line treatment options rather than secondary alternatives.
Early engagement with industry will be critical to identifying cost-effective, practical and resilient delivery solutions.
In parallel, consideration should be given to contractual mechanisms that appropriately recognise fuel and bitumen volatility, including rise-and-fall provisions and fuel indexation approaches, to support continuity of works.
Without appropriate recognition of these cost pressures and a shift in delivery approach, there is a real risk that critical maintenance programs will be delayed or cancelled, increasing long-term costs and reducing the resilience of Australia’s road network.
Current Position: Cost Escalation and Supply Pressure
Global energy market instability and disruption to key shipping routes are now flowing directly into Australia’s infrastructure delivery environment.
Since early March 2026, diesel prices have increased by more than 30%, with some regions experiencing increases approaching 50%, and further volatility expected. This is occurring alongside forecast increases in bitumen of up to 50%, and key construction inputs such as tungsten increasing by up to 100%.
For asset owners, reduced purchasing power is translating into fewer kilometres delivered and increasing risk of program deferrals.
Material and Operational Impacts
Diesel remains the primary cost driver across all stabilisation activities, underpinning in-situ processes, mobilisation, haulage and construction operations.
Hydrocarbon-based inputs such as foamed bitumen and emulsions are subject to global supply constraints and pricing pressure. Cement and lime costs are also rising.
These pressures are amplified in regional and remote areas due to long haul distances and mobilisation requirements.
The Reality Facing Asset Owners
This is a structural shift in infrastructure delivery. Without change, maintenance backlogs will grow, pavement condition will deteriorate and rehabilitation costs will increase.
Deferring works does not reduce cost — it compounds it.
The Opportunity: A Smarter Delivery Approach
Pavement recycling and stabilisation enable a shift away from material-intensive, high-haulage methods.
By reusing in-situ materials, these approaches reduce reliance on constrained resources, lower fuel consumption and allow more kilometres to be delivered within existing budgets.
They also provide a pathway to maintain programs, improve resilience and support long-term performance.
These benefits are being delivered today across Australia.
Sector Commitment
AustStab and its members remain committed to supporting infrastructure delivery and working collaboratively with asset owners to deliver resilient, sustainable and cost-effective outcomes.
Tanja Conners
Chief Executive Officer
AustStab – Pavement Recycling and Stabilisation Association
Enquiries: enquiry@auststab.com.au