Monthly Variable Fuel Rate

The Variable Fuel Rate (VFR) for March 2012 is 10.13%.

In conjunction with our general rate increase in November 2010 we also renamed and realigned our Fuel Adjustment Factor (FAF). This is now termed the Variable Fuel Rate (VFR) and it will provide complete transparency around how we calculate this cost, with the fuel rate taken from the Ministry of Economic Development website.

Our calculation method will make the VFR a clear representation of fuel cost that you can understand as well as one that we will adjust only as the fuel rate changes.

In conjunction with our General Rate Increase in November 2010 we have also renamed and realigned our Fuel Adjustment Factor (FAF). This will now be termed the Variable Fuel Rate (VFR) and it will provide complete transparency around how we calculate this cost, with the fuel rate taken from the Ministry of Economic Development website. Our calculation method will make the VFR a clear representation of fuel cost that you can understand as well as one that we will adjust only as the fuel rate changes.

Past Variable Fuel Rates:

If you have any questions specific to our previous Fuel Recovery regime (Fuel adjustment Factor, FAF) please email your questions to the following address sales@roadstar.co.nz

How we calculate the Variable Fuel Rate (VFR)

Pricing

The total price you pay for a product or service is made up of two components:

• a Base Price; and
• a Variable Price.

In order to calculate the total price you pay, we add these two components together, round the total to the nearest cent and then add GST.

Our Base Price component is the price for our products and services set out in our contract with you.

Our Variable Price component is calculated as a percentage of the applicable Base Price. The percentage which we apply to the applicable Base Price is called the Variable Fuel Rate (VFR). The VFR changes from month to month because it is linked to the changing cost of diesel. We use the VFR that applies on the date you order your product or service.

You can calculate the total price you pay according to the following formula:

Base Price + (Base Price x VFR) = Total Price (excl GST)

For example, if the base price of your product or service was $500.00 and the VFR applying for November 2010 is 3.15%, then the total price you pay would be $515.75 calculated as follows:

Total price (excl GST) = 500.00 + (500.00 x 3.15%) = $515.75

In accordance with clause 7.1 of our terms and conditions, our prices may be amended by giving you 30 days notice in writing.

Further information about the way we calculate the VFR is set out below. For the current VFR see above.

Calculating the VFR

Index Linked

The VFR is linked to the diesel price set out in the Petrol and Diesel Retail Price Graph Data tables published by the Ministry of Economic Development (“Index”). The Index is published on the Ministry of Economic Development website and shows the average weekly diesel price in New Zealand.

Diesel Taxes

The prices shown in the Index exclude diesel taxes, duties and levies. For the purposes of calculating the VFR we add the ETS to the average weekly diesel prices in the Index.

Average Monthly Diesel Price

For the purposes of calculating the VFR we use the weekly figures which are published in the Index to calculate the average diesel price excluding taxes, duties and levies, including ETS for each calendar month.

Two Month Lag

We calculate the VFR for any given month using the average diesel prices from two months earlier. For example, to calculate the November 2010 VFR we will use the average diesel price from September 2010.

Baseline Diesel Price

We have used a baseline average diesel price of 92.25 cents per litre. No VFR will apply in the relevant month (see above) if the average diesel price excluding taxes, duties and levies is less than 92.25 cents per litre in that month.

VFR Table

The VFR alters from month to month according to the average monthly diesel price as shown in the table below. 

The VFR will be calculated in the same manner as set out in the table above where the average diesel price (excl diesel taxes & GST) is more than $1.4925 a litre.