What Is Fuel Adjustment Factor (FAF)?
The Fuel Adjustment Factor or FAF is a surcharge added to your transport rates to cover the cost of fuel.
You will find that most established transport companies will provide the FAF surcharge as an additional cost to your agreed rates.
Working Out The FAF Surcharge
Fuel is a dynamically priced commodity forcing the FAF surcharge to change constantly.
A FAF calculation table is commonly used to determine the FAF surcharge.
The applicable fuel adjustment is based on the average pump price which is calculated from an independent source.
The pump price is based on data collated from fuel purchases made every 24 hours, ensuring the Fuel Adjustment Factor is up to date and correct.
The surcharge is calculated at the end of each month for the month following (current month’s fuel surcharge figures are presented on all invoices).
In the event of extraordinary fuel price movements during a month, the fuel surcharge may be adjusted upward or downward at any time.
Sealink Travel calculates FAF by using the average pump price which we obtain from the website www.pricewatch.co.nz.
Sealink Travel bases their FAF on the variance between the base fuel rate and current fuel pricing.
FAF% moves by 0.8% per 5 cent change in the Price Watch index.