What is a Variable Fuel Factor (VFF)?

The Variable Fuel Factor (VFF) is a charge that is applied to Domestic Courier Services to off-set the current fuel volatility. The total price you pay for a courier product/service will comprise of two components – the base price and the variable fuel factor. Multiplying the base price by the variable fuel factor will give the total price.

Back to top

How much will the VFF cost me?

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

We at Post Haste recognise the increased cost of fuel (VFF) is adding to your business and that the increased price of diesel is growing at a higher rate than previously experienced.

Accordingly we have revised our mechanism. Instead of a 0.1% increase for every additional $0.01 in the average pump price*, we have slowed the rate to 0.1% for every $0.02 increase.

We have published a revised table. As we don't anticipate fuel dropping below $1.45 we have used this as the new trigger point (from $0.95 historically) and fuel will increase/decrease at the slower rate, from this base.

*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.

Back to top

What does this mean for me?

A current diesel rates of $1.89 under the historical pricing mechanism meant a VFF rate of 9.7%. Under the revised mechanism, the rate is 7.4%.

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.

Back to top

Will I be notified of each increase?

Our website will be updated each month detailing the increase/decrease for that month. You can find this page in our Useful Information section.

Back to top

How does Emissions Trading Scheme impact VFF?

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.

Back to top