Variable Fuel Rates
Road User Charges
The Government has recently announced changes to the Road User Charges (RUC), which will take effect from 1 July 2020. See the Ministry of Transport website for more information.
These changes vary depending on vehicle configuration, however, they represent a significant change across our road operations.
From 1 July 2020, the Road User Charge (RUC) surcharge will increase to 0.90% to cover the increase in RUC costs within our transport and courier fleets. The increase is in line with the government changes effective 1 July 2020. Details are listed in the table below.
The total price you pay for a product or service is made up of two components:
- Base Price; and
- Variable Price (encompassing VFR and RUC).
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 comprised of the Variable Fuel Rate (VFR) and Road User Charge surcharge (RUC). 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. The RUC surcharge will only change in line with changes to Road User Charges.
Calculating the VFR
You can calculate the total price you pay according to the following formula:
Base Price + (Base Price x (VFR % + RUC %)) = Total Price (excl. GST)
Example of Courier Post/Pace VFR calculation:
If the base price of your product or service was $5.00 and the VFR applying for December 2019 was 1.40% and RUC 0.60%, then the total price (excl. GST) you pay would be $5.10 calculated as follows:
Total price (excl. GST) = 5.00 + (5.00 x (1.40%+0.60%)) = $5.10
Example of Freight VFR calculation:
If the base price of your product or service was $500.00 and the VFR applying for the month was 3.7% and RUC 0.3%, then the total price you pay would be $520.00 calculated as follows:
Total price (excl. GST) = 500.00 + (500.00 x (3.7%+0.3%)) = $520.00
The VFR is linked to the ‘Diesel main port price excl taxes’ as published in the Weekly Oil Price Monitoring tables, by the Ministry of Business, Innovation & Employment (“Index”). The Index is published on the Ministry’s website on the Oil Price Monitoring page.
The prices shown in the Index exclude diesel taxes, duties and levies. For the purposes of calculating the VFR we add these diesel taxes, duties and levies to the average weekly diesel prices in the Index. To find out the current amount of these diesel taxes see the Energy Prices data table.
Note: 2.6 cents per litre has been added to the Diesel Taxes, Duties and Levies factor to account for the Auckland Regional Fuel Tax
Two Month Lag
The VFR for a given month is calculated based on the Index from two months earlier. For example, to calculate the December VFR, we use the Index price from October.
Baseline Diesel Price - Courier Post & Pace
From the 1st of July 2015, the VFR has used a Baseline Diesel (Index) Price of $1.05. For every $0.02 movement above $1.05 in the Diesel main port price including taxes for a given month, VFR will increase by 0.1% as per the table below.
No VFR will apply in the relevant month if the average diesel price, including taxes is below $1.05 cents per litre in that month.
Baseline Diesel Price - Transpost
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 including taxes, duties and levies is less than 92.25 cents per litre in that month.
The VFR alters from month to month according to the average monthly diesel price as shown in the table below. No VFR will apply in the relevant month if the average diesel price, including taxes is below $1.05 cents per litre in that month.