Australians could be forced to pay significantly more for fruit, vegetables, milk and other groceries over the next three years due to rising trucking fees.
Transport and farming groups also warn the increased Heavy Vehicle Road User Charge, which is expected to raise a further $1.1 billion over four years, could force some businesses to close.
Introduced in 2006, the impost applies to each litre of diesel used by trucks, buses and coaches, and was created to fund road maintenance and repairs.
Federal, state and territory transport ministers voted to increase the fee six per cent each year for the next three years - a charge detailed in the federal budget this week.
But the escalating cost has come under fire from groups who say transport firms and food producers will not be able to shoulder higher costs.
National Road Transport Association chief executive Warren Clark said the rising fees would raise $101 million in the next financial year and more than $391 million by 2026-2027.
"That's more than a billion dollars trucking businesses will have to find somewhere and if they can't pass it on to customers and ultimately consumers, they will go under," he said.
Australian Dairy Farmers president Rick Gladigau said the hike would also likely hit primary producers, both in feed and delivery costs, and put further pressure on their businesses.
"The rise in the heavy vehicle tax will certainly be an impost on dairy farmers as freight costs will increase for milk, hay, grain and everyday needs, and these are likely to be passed on to farmers," he said.
Queensland independent MP Bob Katter said the increased charge would ultimately raise the price of everyday grocery items or force companies out of business.
"Either the consumer pays more for Australian fruit and vegetables or farmers walk off the land and small businesses will shut," he said.
"Something must give - either government reverses this insidious charge or transport companies, farmers and small businesses go bust or we all pay more at the check-out."
But Federal Treasurer Jim Chalmers defended the increase, saying it had been decided by transport ministers from around Australia as the least expensive option.
"The choice was between a 10 per cent increase and a six per cent increase and we went with a six per cent increase," he said.
"This is the usual operation of the road user charge John Howard introduced in 2006."
Under the charges, charges on heavy vehicles will rise from the current rate of 27.2 cents per litre of diesel to 32.4 cents by 2025.
Australian Associated Press