The Australian Council of Trade Unions launched a case to the Fair Work Commission on Tuesday to increase vehicle allowances, arguing workers were paying more just to do their jobs.
The average vehicle allowance provided by employers is set at 99 cents per litre, with about 40 per cent covering fuel prices.
The unions want a rise in the allowance of at least 10 cents to account for the spike in fuel costs driven by the Iran war and the closure of the Strait of Hormuz.
The jump in prices should not mean workers have to pay more from their own pockets to carry out their work, ACTU secretary Sally McManus said.
"Petrol prices have surged, but workers' vehicle allowances have not even remotely kept up," she said.
"Australians are paying out of their own pockets just to do their job and this is not sustainable amid all the other cost of living pressures working people are enduring."
The submission to the workplace watchdog would cover workers who typically use their car as part of their job, such as delivery drivers, aged care workers and those in nursing and disability support.
While the rate for vehicle allowances are normally changed on July 1, the unions have called for the rate to be increased earlier.
"It is a basic principle that workers should not be out of pocket when they are required to use their own vehicle at work, they must be fully compensated," Ms McManus said.
"The current allowance is not delivering fair compensation to cover cost and so it must be adjusted."
The Australian Services Union, which represents disability workers, welcomed the push for an increase in the vehicle allowance.
Its NSW and ACT secretary Angus McFarland said many of its members had been unable to afford fuel because of the spike in costs.
"Hundreds of disability support workers have told us that the cost of fuel is affecting their work, their wellbeing and their lives outside their job," he said.
"The higher that fuel prices are, the more money disability support workers lose simply for doing their job of driving people with disability to the care and support they depend on."
The National Road Transport Association has warned more than 70 per cent of trucking businesses say they won't survive beyond six months if conditions persist.
The group's chief executive Warren Clark urged the federal government to implement its economic resilience program as soon as possible to provide financial relief.
Prime Minister Anthony Albanese unveiled the program at the beginning of April, which would provide interest-free loans to help trucking and transport companies.
"More than 10 days later, all we have is a holding website asking people to register for updates. That is not good enough," Mr Clark said.
"Operators are running out of time. Without access to cash now, we are going to see trucks parked up and supply chains disrupted within weeks."
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