Diesel at $2.70+: Energy Pain Index shows Australian business pain is rising

Agile Energy warned manufacturers, processors and other diesel-dependent businesses are being squeezed from every direction as its Energy Pain Index points to worsening pressure across the country
 

Australian manufacturers, processors, farmers, logistics operators and other heavy industries are being urged to slash their reliance on diesel wherever operations can be electrified, as soaring fuel costs add another punishing layer to the nation's growing business energy crisis.
 

Diesel prices have surged sharply in recent weeks. The Australian Institute of Petroleum recorded the national average retail diesel price at 273.6 cents per litre for the week ending September 20, up from 248.3 cents on August 23, an increase of more than 25 cents a litre in less than a month.
 

Wholesale prices remain elevated, with average terminal gate diesel prices on September 23 ranging from 268.5 cents per litre in Perth to 284.3 cents in Darwin.
 

Agile Energy founder and CEO Jack Kapoor said the increases were becoming deeply painful for businesses already battling high electricity costs, wages, insurance, materials and other operating expenses.
 

"Diesel is becoming another massive pain point for Australian business and for some heavy industries there is nowhere left to hide," Kapoor said.
 

"When you are manufacturing, processing, farming, moving freight or operating heavy machinery, energy isn't a discretionary expense. You can't simply stop using it because the price has gone up.
 

"Businesses that consume thousands or tens of thousands of litres of diesel can see enormous amounts wiped from their margins when fuel jumps by 20, 30 or 40 cents a litre.
 

"This is no longer just pain at the petrol bowser, this is becoming a serious business-cost crisis."
 

Heavy industry is wearing the diesel shock
 

The latest increases are particularly significant because diesel is deeply embedded across Australian industry, powering transport, agricultural equipment and many industrial operations. Recent reporting has highlighted the impact on agriculture and freight, with one NSW grain producer estimating increased diesel and other input costs were costing around 40 per cent of profitability.

Kapoor said those pressures ultimately move through supply chains.
 

"A manufacturer pays more to operate equipment and receive materials, the freight company pays more to move the finished product and retailers pay more to have it delivered," Kapoor said.
 

"Some businesses can pass those costs on. Others compete in markets where they simply can't, so the increase comes straight out of their margin.
 

"Either way, somebody pays for expensive diesel."
 

Energy Pain Index points to a broader problem
 

Kapoor said the diesel shock is arriving as Agile Energy's inaugural Australia's Energy Pain Index identifies significant existing energy-cost pressures and disparities for businesses across the country.
 

The quarterly Index examines commercial electricity pricing, network demand charges, industry impacts and emerging energy cost drivers to provide a snapshot of where Australian businesses are experiencing the greatest pressure.
 

Agile Energy's modelling found an identical commercial business could face a difference of almost $30,000 a year in electricity costs depending on the distribution network servicing its premises.
 

For a modelled business consuming 50,000 kWh a month, increasing peak demand from 120kW to 220kW while keeping total electricity consumption unchanged could add approximately $16,200 a year through demand charges.
 

"We started the Energy Pain Index because businesses need to understand the total energy pressure they are facing," Kapoor said.
 

"Electricity was already hurting, now diesel has surged as well.
 

"For energy-intensive Australian businesses, these costs are stacking on top of each other, and that is why businesses need to start treating energy as a strategic financial issue rather than another bill the accounts department pays every month."
 

Kapoor: use the sun to take pressure off diesel
 

Kapoor said businesses should urgently investigate where diesel-powered operations can practically be replaced or supplemented through electrification supported by commercial solar and battery storage.
 

He stressed that solar cannot simply replace diesel in every industrial process, vehicle or piece of equipment, but said the scale of modern commercial systems means solar should no longer be dismissed as something suitable only for offices, shops and homes.
 

"Solar isn't just for putting a few panels on the office roof anymore, it can support serious industrial energy loads and provide an economical means of power backup as well," Kapoor said.
 

"Manufacturers and processors should be going through their operations and asking a very simple question: where are we burning expensive diesel today that could technically and economically be replaced by electricity?

"Where electrification is practical, commercial solar can allow a business to generate a significant amount of that electricity on site, while batteries can help manage peaks and extend the usefulness of that generation.
 

"You may not be able to electrify every truck, machine or process tomorrow, but every litre of diesel you can economically remove from an operation reduces your exposure to an international fuel market you cannot control."
 

From factories to food processing: the opportunity is enormous
 

Kapoor said the opportunity is particularly significant for businesses with large premises and substantial daytime energy requirements, including manufacturing plants, food and beverage processors, cold-storage facilities, warehouses, agricultural operations, industrial sites and logistics facilities.
 

Large rooftops and available land can potentially accommodate substantial commercial solar installations, while batteries and electrified equipment can allow businesses to use more of the energy they generate on site.
 

"This is about industrial resilience as much as sustainability," Kapoor said.
 

"If you manufacture or process products in Australia, energy is fundamental to your competitiveness.
 

"Businesses can't control wars, global oil markets, refinery disruptions or international diesel supply, but they can start taking greater control over how much energy they need to buy from those markets."
 

The cost of waiting is getting harder to ignore
 

The current diesel spike has been linked to disruption in international supply associated with the Middle East conflict, while Australia remains highly exposed to international diesel markets. Recent analysis cited by the ABC puts Australia's imported share of diesel at around 80 to 90 per cent.
 

Kapoor said the latest spike should be a catalyst for Australian businesses to reconsider energy infrastructure that may have been postponed when diesel was cheaper.
 

"Every time fuel prices settle, businesses breathe a sigh of relief and put the energy conversation back in the drawer," he said.
 

"Then the next international shock arrives and they're exposed all over again.
 

"Australian industry needs to stop treating high energy prices as a temporary inconvenience and start designing businesses that are structurally less exposed to them.
 

"The cheapest litre of diesel during the next global fuel crisis could ultimately be the litre your business no longer needs to buy."

About Australia's Energy Pain Index

Australia's Energy Pain Index is Agile Energy's new quarterly analysis of commercial electricity cost pressures across Australia. It examines electricity pricing trends, network demand charges, industry impacts and emerging cost drivers to help businesses better understand where energy costs are rising and what practical strategies are available to reduce them.
 

About Agile Energy
 

Agile Energy is one of Australia's fastest-growing clean-energy companies, delivering large-scale solar, battery and electrification solutions for the commercial, industrial, healthcare and property sectors. The company designs, finances, builds and operates integrated clean-energy systems that help businesses reduce costs, decarbonise operations and participate in virtual power networks. With deep engineering expertise, financial discipline and a long-term ownership mindset, Agile Energy is redefining how organisations generate, store and trade electricity creating measurable financial and environmental performance across Australia's transition to a smarter, more resilient energy future. Further information can be found at: agileenergy.com.au