Fuel Theft Is Rising. Here's Why Your Policy Might Not Cover It.
By Bailey Reed
Fuel prices have been elevated and volatile for years. But since the outbreak of the Middle East conflict, something else has been rising alongside them: theft.
The link isn't coincidental. Research is clear: service station fraud in any given month can be predicted from the average petrol price one month earlier (The Conversation, 2026). When prices spike, theft follows. The Australasian Convenience and Petroleum Marketers Association reported that fuel theft from service stations increased between 8 and 30 per cent nationally since the start of the Middle East war (The Conversation, 2026).
More broadly, insurers and law enforcement are seeing a lift in opportunistic theft across the board as cost of living pressures intensify, with fuel, vehicles and easily resold equipment becoming primary targets.
And with the ACCC already monitoring domestic fuel pricing and engaging directly with major fuel companies about their conduct during the conflict there's little sign of relief at the bowser anytime soon (ACCC, 2026).
The Scale of the Problem
Even before the current conflict, the numbers were significant. Drive-off thefts alone were costing Australian retailers around $80 million a year, and across transport, agriculture and construction, total losses were closer to $200 million annually, with actual figures likely higher due to underreporting.
It hasn't gotten better. In NSW, fail-to-pay incidents rose from 9,097 in 2016 to a peak of 15,326 in 2024 (Phys.org, 2026). And individual incidents are getting bigger, thefts involving 150 to 800 litres in a single hit are becoming more common, particularly in rural areas.
Farmers have been hit especially hard. More than 20 per cent of crime reported by Australian farmers is now fuel-related, with construction and agriculture businesses collectively losing $95 million from fuel theft each year (Dairy News Australia, 2026). Bulk diesel stored in remote locations with limited security is exactly the kind of target opportunistic and organised thieves are looking for right now.
At the same time, vehicle theft is also trending upward, particularly across commercial utes, trucks and plant equipment. In many cases, stolen vehicles are being used to facilitate further theft, including siphoning fuel or transporting stolen diesel, compounding the loss exposure for businesses.
The Gap Nobody Talks About
Here's the problem: most insurance policies haven't kept pace with how this risk is actually playing out.
Fuel often sits in a grey area in policy wordings, somewhere between a consumable and stock, and that ambiguity rarely resolves itself in the insured's favour at claim time. Many policies only respond if there's accompanying physical damage to a vehicle or storage tank. Siphoned diesel, no damage? In a lot of cases, the policy simply doesn't respond.
The gap looks different depending on your business type:
Farms face the most acute exposure, yet many farm policies either exclude fuel theft or leave it unclear. Given the documented scale of losses in this sector, that's a significant problem.
Motor fleets deal with high frequency, rising severity. Most fleet policies are built around vehicle damage, not fuel, meaning theft without physical damage to the vehicle itself often falls outside the insuring clause.
Where vehicle theft is involved, cover may respond differently, but only if the policy is structured correctly. The interaction between motor and property sections is often misunderstood and can leave gaps if not clearly defined.
SMEs storing fuel for generators or plant equipment frequently assume they're covered under contents or stock, and frequently aren't.
Larger commercial risks need fuel explicitly defined within their ISR policy with appropriate sub-limits and conditions. Without that, the same ambiguity applies.
What to Do About It
On the risk management side, a layered approach is most effective: locking fuel caps, anti-siphon devices, tank guards, secure and well-lit storage and where practical, telematics that flag unexpected drops in tank levels. These controls reduce exposure and, increasingly, influence what cover is available and at what price.
Given the parallel rise in vehicle theft, additional controls such as immobilisers, GPS tracking and secure overnight parking are becoming just as critical, particularly for fleets and mobile plant.
On the insurance side - check your wording and talk to your broker. Don't assume fuel is covered. If it isn't explicitly addressed, it probably isn't protected.
If you'd like a review of your current program to understand where the gaps might be, reach out to the team at Sage Insurance. We work across farm, fleet, commercial and SME risks and can make sure your coverage reflects the reality of how your business operates.
Because the worst time to discover a gap in your policy is after the tank's been drained.
Bailey brings strong expertise across insurance for transport, agriculture and heavy vehicle fleets, delivering tailored solutions with a focus on client needs.
Fuel prices have been elevated and volatile for years. But since the outbreak of the Middle East conflict, something else has been rising alongside them: theft.
The link isn't coincidental. Research is clear: service station fraud in any given month can be predicted from the average petrol price one month earlier (The Conversation, 2026). When prices spike, theft follows. The Australasian Convenience and Petroleum Marketers Association reported that fuel theft from service stations increased between 8 and 30 per cent nationally since the start of the Middle East war (The Conversation, 2026).
More broadly, insurers and law enforcement are seeing a lift in opportunistic theft across the board as cost of living pressures intensify, with fuel, vehicles and easily resold equipment becoming primary targets.
And with the ACCC already monitoring domestic fuel pricing and engaging directly with major fuel companies about their conduct during the conflict there's little sign of relief at the bowser anytime soon (ACCC, 2026).
The Scale of the Problem
Even before the current conflict, the numbers were significant. Drive-off thefts alone were costing Australian retailers around $80 million a year, and across transport, agriculture and construction, total losses were closer to $200 million annually, with actual figures likely higher due to underreporting.
It hasn't gotten better. In NSW, fail-to-pay incidents rose from 9,097 in 2016 to a peak of 15,326 in 2024 (Phys.org, 2026). And individual incidents are getting bigger, thefts involving 150 to 800 litres in a single hit are becoming more common, particularly in rural areas.
Farmers have been hit especially hard. More than 20 per cent of crime reported by Australian farmers is now fuel-related, with construction and agriculture businesses collectively losing $95 million from fuel theft each year (Dairy News Australia, 2026). Bulk diesel stored in remote locations with limited security is exactly the kind of target opportunistic and organised thieves are looking for right now.
At the same time, vehicle theft is also trending upward, particularly across commercial utes, trucks and plant equipment. In many cases, stolen vehicles are being used to facilitate further theft, including siphoning fuel or transporting stolen diesel, compounding the loss exposure for businesses.
The Gap Nobody Talks About
Here's the problem: most insurance policies haven't kept pace with how this risk is actually playing out.
Fuel often sits in a grey area in policy wordings, somewhere between a consumable and stock, and that ambiguity rarely resolves itself in the insured's favour at claim time. Many policies only respond if there's accompanying physical damage to a vehicle or storage tank. Siphoned diesel, no damage? In a lot of cases, the policy simply doesn't respond.
The gap looks different depending on your business type:
Farms face the most acute exposure, yet many farm policies either exclude fuel theft or leave it unclear. Given the documented scale of losses in this sector, that's a significant problem.
Motor fleets deal with high frequency, rising severity. Most fleet policies are built around vehicle damage, not fuel, meaning theft without physical damage to the vehicle itself often falls outside the insuring clause.
Where vehicle theft is involved, cover may respond differently, but only if the policy is structured correctly. The interaction between motor and property sections is often misunderstood and can leave gaps if not clearly defined.
SMEs storing fuel for generators or plant equipment frequently assume they're covered under contents or stock, and frequently aren't.
Larger commercial risks need fuel explicitly defined within their ISR policy with appropriate sub-limits and conditions. Without that, the same ambiguity applies.
What to Do About It
On the risk management side, a layered approach is most effective: locking fuel caps, anti-siphon devices, tank guards, secure and well-lit storage and where practical, telematics that flag unexpected drops in tank levels. These controls reduce exposure and, increasingly, influence what cover is available and at what price.
Given the parallel rise in vehicle theft, additional controls such as immobilisers, GPS tracking and secure overnight parking are becoming just as critical, particularly for fleets and mobile plant.
On the insurance side - check your wording and talk to your broker. Don't assume fuel is covered. If it isn't explicitly addressed, it probably isn't protected.
If you'd like a review of your current program to understand where the gaps might be, reach out to the team at Sage Insurance. We work across farm, fleet, commercial and SME risks and can make sure your coverage reflects the reality of how your business operates.
Because the worst time to discover a gap in your policy is after the tank's been drained.
Bailey brings strong expertise across insurance for transport, agriculture and heavy vehicle fleets, delivering tailored solutions with a focus on client needs.
