We have devised a Fuel Surcharge mechanism to account for exceptional increases in diesel fuel prices during volatile fuel markets which will provide customers with better visibility of the impact of such costs to aggregate prices.
It is our intention that the fuel surcharge mechanism will only be triggered in highly volatile fuel markets where there are exceptional increases to fuel.
The surcharge uses a diesel fuel price index which is updated monthly to reflect changes in average fuel prices. The monthly index value is taken from a Government publication issued by the Department for Business, Energy & Industrial Strategy. We believe by the use of 3rd party approved data it provides an unbiased monthly calculation.
The surcharge rate is 3 pence tonne on material delivered for every 1 pence increase in the fuel price index above the benchmark diesel fuel price. This rate reflects the cost of fuel associated across the entire Aggregate supply chain from extraction, processing through to distribution. A lower surcharge rate of 0.5 pence per tonne applies for customers who choose to collect from our Aggregate quarries, wharfs and depots. We have set the 2018 benchmark diesel fuel price at £1.32 per litre.
To share the impact of increasing diesel fuel prices, CEMEX shall absorb the first 3 pence per litre increase in diesel prices above the annual benchmark price as a fair sharing of risk associated with fuel price volatility.
In normal trading conditions this will be ZERO but if we experience exceptional increases in fuel then a surcharge will be calculated and invoiced per tonne sold so that customers can clearly see the surcharge that applies to each delivery or collection.
In the event that the surcharge is triggered we will provide written notification and justification prior to applying any charges.