Fuel crisis Australia: Builders warn building costs up to 50 per cent higher, Triple M Brisbane interview

Rising tensions in the Middle East and the resulting fuel crisis are hitting Australia’s construction sector, with builders warning of soaring costs and supply pressures reminiscent of the post-COVID boom.

The chief executive of Master Builders, Paul Bidwell, says the industry is already feeling the strain, as suppliers flag significant cost hikes on key materials, particularly plumbing products.

Speaking on Triple M Breakfast Brisbane with Marto, Margaux and Dan, Mr Bidwell said the situation is “feeling a bit like the period post-COVID”.

“We have been inundated with calls from members with concerns,” he said.

“The suppliers have notified them of price hikes ranging from 5 per cent to as much as 50 per cent. And it’s the plumbing products particularly.”

Mr Bidwell pointed to real-world examples of the impact, including a builder working on a two-stage unit development now facing major cost blowouts.

“I’ve got a builder involved in a two-stage unit development project… his first stage is another $170,000 because of the copper pipe, PVC pipe, an additional $75,000 for that, $170,000. The second stage is $140,000,” he said.

“Now someone’s going to wear that cost. If the plumber and the builder have locked in a price, then it’s the plumber’s problem.

“If they haven’t and the builder’s locked in a price with the developer, it’s the builder’s problem.”

The warnings come as the industry continues to grapple with the lingering effects of pandemic-era disruptions, with some suppliers accused of overcorrecting amid uncertainty.

“We know that some people have legitimate costs that they’re passing along. Others, I think, are getting ahead of the game because they’re still a bit traumatised with what happened post-COVID, and we’re still dealing with the fallout of that,” Mr Bidwell said.

He urged builders, subcontractors and suppliers to prioritise clear communication as costs fluctuate.

“The suppliers need to be talking to the subbies or the tradies that they’re supplying. Subcontractors need to be talking to the builder and the builder needs to be talking to their clients,” he said.

For everyday Australians looking to build or renovate, financing remains a key hurdle, particularly as banks remain wary of uncertain project costs.

“If you’ve got a bank involved, the banks will not wear a cost plus contract. And that’s because they can’t see what the final figure is looking like,” Mr Bidwell said.

“The banks have been the sticking point when it comes to fixed price contracts.”

Despite the challenges, Mr Bidwell noted that historically, tough conditions can sometimes boost profitability across the sector.

“The hardest times are during periods like this when there’s more work than you can poke a stick at and you’ve got that cost escalation… history shows us that they make better money when things are tough,” he said.

“But that’s just sort of a perverse way that our industry works.”

The warnings come as Australia faces a fuel supply crunch linked to the Iran war. Almost 550 service stations nationwide are experiencing shortages of at least one type of fuel, with one in eight in New South Wales affected.

Industry groups warn the crisis could ripple through the economy, pushing up costs across farming, mining, air travel, and construction. Farmers are already rationing fuel to keep essential machinery running, and mining operations may consider extending fly-in, fly-out worker rosters to conserve jet fuel.

“Over the last three weeks at my own properties and stations, we’ve been taking less fuel than we actually require,” said National Farmers Federation President Hamish McIntyre, highlighting the strain on regional communities.