Variable Fuel Factor
RUC Adjustment Factor
|Recently the government announced another increase to the current Road User Charges (RUC's). As such please be aware that effective June 29th 2020 RUC charges will increase from 4.2% to 4.5%. Click here for more information.|
Temporary Service Continuity Surcharge
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Variable Fuel Factor Table
Variable Fuel Factor FAQ
- Q: What is a Variable Fuel Factor (VFF)?
A: Fuel costs are understandably one of the most significant and variable cost components of our business. The Variable Fuel Factor (VFF) was introduced for the purpose of recovering the increased costs in fuel, primarily diesel, to fairly compensate our contractors, line haul operators and where relevant, to cover increased airfreight and ferry fuel costs.
- Q: How much will the VFF cost me?
A: The VFF will be calculated on the first day of each month and will be based on the average diesel price (adjusted for regional fuel taxes) from two months earlier. By using this mechanism, we can:
- Provide transparency for customers to see how it is calculated
- Take into account any shifts in the price of fuel that impact significantly on the price of moving courier items
On the 27th August 2018 the retail price of fuel as published by the Ministry of Business, Innovation and Employment was adjusted by $0.32 to account for the Auckland Regional Fuel Tax. (Auckland Council implemented a $0.10/litre [excl GST] regional Fuel Tax on July 1 2018)
- Q: How will this impact my business?
A: We will be using a base rate of $0.95 (diesel pump price including GST) for domestic courier services.
Every 1c movement above $0.95, in the average pump price*, will result in a 0.1% increase in our pricing. VFF will be rounded up to the nearest cent; this is updated monthly and will be automatically adjusted on your invoice.
The rates for our Variable Fuel Factor will be recalculated on a monthly basis.
Nationally and globally, the courier and transportation markets have seen massive increases in fuel prices. In the past, Castle Parcels has tried hard to absorb these costs, minimising the impact on our customers. Unfortunately prices have come to a level where we must follow other transport operators in implementing a "fuel surcharge" system.
*Average diesel price (adjusted for regional fuel taxes) as published by the Ministry of Economic Development - we will calculate the VFF for any given month using the average diesel prices from two months earlier.
- Q: Will I be notified of each increase?
A: Our website will be updated each month detailing the increase/decrease for that month. You can find this page in our FAQs section.
- Q: How does Emissions Trading Scheme impact VFF?
A: The New Zealand Emissions Trading Scheme (ETS) is part of the Government's primary response to global climate change. Effective 1st July 2010 an additional tax will be applied to fuel, and passed on through the pump price. For more information on the ETS visit www.mfe.govt.nz/ets.
- Q: What is the current 'base rate' at which I will be charged VFF?