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Woolworths has increased its fuel levy surcharge for suppliers due to rising logistic prices and Middle East conflicts, impacting major brands like Sanitarium and Arnott's. In metro areas, the fuel levy rose from 17.47% to 19.88%, while in regional areas it went up from 44.20% to 50.30%. Experts warn that these higher operational costs will likely be passed on to consumers, though not necessarily in direct proportion. The article reports on the potential impact of increased fuel prices and logistics costs on consumer grocery prices, with warnings from professors about impending inflationary pressures and the likelihood of price hikes for shoppers.
Written locally by qwen2.5:14b on 2026-10-07,
using this article's own text rather than the other coverage of the
same event (that is the story summary below).
Story summary
Woolworths recently almost tripled its freight fuel surcharge for suppliers due to rising diesel costs, with the metro area rate jumping from 17.47% to 19.88%, and regional rates increasing from 44.20% to 50.30%. This hike follows the Iran-US conflict that began in February, which escalated fuel prices. Primary Connect, Woolworths' logistics subsidiary, manages freight for over 1,000 grocery producers including brands like Sanitarium and PepsiCo. Professor Rico Merkert from the University of Sydney noted such surcharges are common to manage price volatility but could eventually contribute to higher retail prices if passed along to consumers. Meanwhile, Professor Bahram Fahimnia warned that with inflation already high due to fuel costs, these increases will likely be felt by Australian shoppers at checkout counters.
Written for “Woolworths Freight Costs Increase” on 2026-10-07,
grounded in this article and the 1 other(s) covering the same event.
Why this leaning score
The model judged this article politically coded and scored it -0.25, but all 2 of its quote(s) are attributed speech - words the article quotes from someone, not the article's own narration, so the score is not published.
Written under an earlier scoring contract, which gave a paragraph
rather than checkable quotes. Re-analysing this article replaces it.
Leaning score withheld for article 62343: attributed speech only · logged 2026-10-07
Customers are set to pay even more for their groceries as Woolworths increases its fuel levy surcharge for suppliers amid rapidly rising logistic prices.
asserted
Woolworths → set → prices
The ongoing war in the Middle East, which has blocked major oil supply routes, has seen fuel prices continue to climb as the conflict drags on.
asserted
conflict → block → routes
Logistic companies both in metro and regional areas say they have no choice but to increase their fuel levies to stay afloat.
asserted
they → say → levies
This includes Primary Connect, which is the main supply arm of Woolworths that the supermarket giant used to transports goods from suppliers to its distribution centres and stores.
asserted
giant → include → centres
The company is also used by several other major brands including Sanitarium, PepsiCo, Ingham's and Arnott's.
asserted
company → use → Sanitarium
Its fuel levy - charged as a percentage of the fuel used in the trip - has surged in recent months for metropolitan areas from 17.47 per cent to 19.88 per cent.
asserted
levy → charge → cent
In regional areas the fees increased from 44.20 per cent to 50.30 per cent.
asserted
fees → increase → cent
Before war between Iran and the United States broke out in February, the fuel levy Primary Connect charged in metro areas was just 7.28 per cent.
asserted
Connect → break → areas
Woolworths' logistics arm, Primary Connect, has increased its fuel levy
asserted
arm → increase → levy
Experts warned the increased operational costs would be passed onto customers
University of Sydney supply chain management professor Rico Merkert said it was common for the fuel levy to increase alongside oil prices.
However, he explained that is only one factor in the price passed onto customers.
asserted
that → warn → customers
'Higher fuel levies can eventually contribute to higher retail prices and hence inflation, but freight is only one element of the final shelf price, so consumers would not necessarily see a direct or proportional increase at the check-out,' he told ABC.
asserted
he → contribute → ABC
Another University of Sydney professor, Ben Fahimnia, said grocery prices would have to increase so suppliers alone weren't stuck with higher operational costs.
asserted
suppliers → say → costs
'They have absorbed some of the costs initially and have tried to find savings elsewhere, but there is a limit to what businesses can absorb,' Professor Fahimnia said.
'Someone ultimately has to pay, and, at these fuel levy rates, that will be Australian consumers at the check-out.'
Australia's inflation rate is remaining stubbornly high, which is in part driven by high fuel costs.
asserted
which → absorb → costs
In August alone, fuel prices rose 14.8 per cent, compared to 7.5 per cent in July.
asserted
prices → rise → July
Customers aren't expected to be lumped with the full operational cost increase but could see higher prices, especially if conflict in the Middle East continues
The Reserve Bank of Australia lifted interest rates at its most recent meeting to counter inflation and are forecast to likely lift them again in November.
uncertain
Bank → expect → November
Reserve Bank governor Michele Bullock said in her press conference last week that businesses were preparing to pass on higher fuel costs if necessary.
asserted
businesses → say → costs
'The longer it [the war] lasts, if businesses were thinking, 'Oh, look, it'll come off, I won't pass on costs,' the longer it goes, the more likely it is that businesses will just try to pass through the cost increases,' Ms Bullock said.
asserted
Bullock → last → increases
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