Fuel costs are up sharply, and there’s no clear sign of them coming down soon. Whether you run vehicles, send freight, or have a team that travels to clients, the pressure is already showing up somewhere in your numbers.
The immediate trigger is the conflict in Iran and the resulting closure of the Strait of Hormuz, a chokepoint for around 20% of the world’s oil supply. Brent crude jumped from around $65 a barrel to over $100 within weeks. A ceasefire was announced in April, but traffic through the strait remains well below normal, and analysts aren’t expecting prices to ease quickly.
The knock-on effects go beyond petrol and diesel. LNG prices have surged. Freight rates are up. Supply chains that depend on Middle East shipping routes are under pressure. The New Zealand Government has already released petroleum reserves and introduced a tax credit for households to offset rising fuel costs, which gives you a sense of how seriously the situation is being taken.
None of this is something you can control. But how exposed your business is to fuel price volatility — that part you can work on.
Five things worth doing now
- Look at your contracts and pricing
If fuel or freight is a real input cost for your business, your contracts should reflect that. Many don’t. Adding index-linked fuel surcharge clauses to new agreements gives you a mechanism to adjust pricing when costs push past a defined threshold. It’s not about passing every price movement on to clients — it’s about making sure your pricing structure doesn’t quietly erode your margin every time oil spikes.
- Cut the kilometres you don’t need to be doing
This may sound obvious, but most businesses have never conducted a proper audit of their travel patterns. For businesses operating vehicles or field teams, AI-powered route-planning tools can reduce fuel consumption considerably by calculating efficient routes in real time and eliminating idle time. For everyone else, it might just mean batching client visits, consolidating travel days, or being more deliberate about what actually needs to happen in person.
- Review what your freight and suppliers are charging you
Suppliers and freight companies are dealing with the same cost pressures you are — and they’re passing them on. Sometimes with a note, sometimes not. It’s worth going back through what you’re actually paying and whether those arrangements still make sense. Consolidating orders, renegotiating minimums, finding alternatives — none of it is a silver bullet, but the cumulative effect can be real.
- Set some expectations around how vehicles are used
Driver behaviour has a genuine impact on fuel costs — hard acceleration, idling, and motorway speeds all burn more fuel than necessary. Telematics tools let you track this, but you don’t necessarily need technology to make progress. Clear policies and straightforward expectations can shift habits. Also worth checking: if staff use personal vehicles for work, are your reimbursement rates still accurate? Many businesses haven’t updated them in a while.
- Start thinking about EVs — seriously this time
The economics of switching to electric vehicles have improved considerably for NZ businesses. Running costs per kilometre are substantially lower than petrol or diesel equivalents, and the tax position has got better too.
Under the Government’s Investment Boost scheme, which took effect in May 2025, businesses can claim an immediate 20% tax deduction in the year of purchase on new eligible assets — vehicles included — on top of standard depreciation. For mixed-use vehicles, the deduction applies to the business-use portion. The FBT treatment of employer-provided EVs is also under active review as part of broader tax reform.
If you’re due to replace vehicles in the next year or two, it’s worth having the conversation with us before you commit. The timing of a purchase relative to your financial year can make a meaningful difference to your tax position.
Getting on top of your fuel-related costs
None of these strategies requires a major overhaul. Most are practical steps you can start on now — reviewing a contract here, changing a travel policy there. The businesses that manage rising input costs well tend to be the ones that act early rather than absorbing the impact and hoping conditions improve.
If you want to work through the numbers and identify where your exposure actually sits, get in touch with our team. We’ll help you figure out what’s worth doing.