Many Queensland strata committees are currently receiving notices from service providers introducing a fuel levy surcharge. These notices are becoming more common across cleaning, gardening, waste, and maintenance services.

The key question for committees isn’t just whether the levy applies—but why it’s being introduced and what it means for your scheme’s overall costs.

Why Are Fuel Levies Being Introduced?

From what we are seeing across the industry, fuel levies are being introduced as a direct response to sustained increases in operating costs, particularly for contractors who rely heavily on vehicles and transport.

Importantly, these are not arbitrary increases—they are typically linked to several underlying pressures.

1. Direct Fuel Cost Increases

   Many contractors are attending multiple sites daily, often across wide geographic areas. Even modest increases in fuel prices can significantly impact:

   • Daily travel costs
   • Fleet operating expenses
   • Time spent on-site vs in transit

   Rather than increasing base pricing across all services, some providers are isolating this cost as a separate, transparent surcharge.

2. Flow-On Costs from Suppliers and Materials

   Fuel impacts more than just vehicles. It also affects:

   • Delivery of cleaning products, parts, and equipment
   • Waste transport and disposal fees
   • Supplier pricing passed down the chain

   In many cases, contractors themselves are receiving fuel surcharges from their own suppliers, which they are then passing through.

3. Margin Pressure on Service Providers

   Many strata service providers operate on relatively tight margins. Recent cost increases—fuel, wages, materials—have compounded quickly.

   Rather than renegotiating entire agreements, a fuel levy allows providers to:

   • Recover a specific cost pressure
   • Avoid resetting base pricing
   • Adjust more easily if conditions change

4. Typical structure of levies

   Based on current fuel levy notices circulating in the market, fuel levies are commonly:

   • In the range of 3% to 15% of service fees
   • A small, fixed charge per visit
   • the high percentage range is rare and more prevalent with large commercial truck operators, such as diesel fuelled pump trucks for used to clean grease traps and pits. Fortunately, these services are most likely completed monthly, quarterly etc), or

   They are often described as:

   • Temporary or “until further notice”
   • Subject to review depending on fuel movements

This variability is important for committees to understand when assessing long-term impact.

What Does This Mean for Your Scheme?

Individually, a fuel levy may seem insignificant. However, committees should focus on the aggregate effect.

If multiple providers apply a 3–5% increase, the combined effect across:

• Cleaning
• Gardening
• Waste
• Maintenance

can result in a meaningful shift in annual operating costs.

Budget Timing Pressures

Most strata budgets are set annually. Mid-year increases can:

• Reduce contingency allowances
• Create budget shortfalls
• Require adjustment in the next financial cycle

Variable vs Fixed Costs

Unlike standard contract increases, fuel levies may:

• Fluctuate
• Be reviewed periodically
• Be removed—or increased—depending on conditions

This introduces a level of uncertainty that committees should factor into planning.

How Should Committees Approach These Notices?

A practical, measured approach is key.

1. Understand How the Levy Is Applied

   Not all levies are structured the same. Clarify:

   • Percentage vs fixed fee
   • Per service vs per invoice
   • Whether GST applies
   • Whether it is reviewed or capped

2. Assess Whether the Increase Is Reasonable

   Compare:

   • The percentage increase
   • What other suppliers are doing
   • Whether the justification aligns with current conditions

   A levy that reflects broader market behaviour is more likely to be reasonable.

3. Look At the Total Financial Impact

   Avoid assessing each notice in isolation. Instead:

   • Calculate the total additional annual cost
   • Consider the impact across all suppliers
   • Determine whether it fits within current budgets

4. Engage Where Needed

   If the impact is material, committees can:

   • Ask how the levy has been calculated
   • Seek confirmation on review periods
   • Discuss alternative approaches (e.g. fixed pricing for a defined period)

   In many cases, suppliers are open to discussion—particularly where committees are informed and proactive.

5. Use The Opportunity to Review Costs

   These notices can act as a useful trigger to:

   • Benchmark supplier pricing
   • Review service levels
   • Ensure overall value for money

Planning Ahead

Fuel levies highlight a broader trend: cost volatility is now a normal part of strata operations.

Committees should consider:

• Allowing for contingencies in future budgets
• Regularly reviewing supplier costs
• Expecting that similar surcharges may arise in other areas

Final Thoughts

Fuel levy notices are not unusual in the current environment—but they should not be overlooked.

For committees, the focus should be on:

• Understanding the drivers behind the increase
• Assessing the true financial impact
• Responding in a measured and informed way

Handled properly, these situations are manageable. Ignored, they can quietly erode a scheme’s financial position over time.

Article Contributed by Karl Hope, Senior Strata Community Manager at Archers the Strata Professionals.

Karl Hope is part of Archers the Strata Professionals, supporting committees across Queensland with practical, commercially focused strata advice.

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