Double-dip fuel charge scrapped

Industrial relations commission decides to scrap fuel surcharge in a move described as a win for prime contractors

Double-dip fuel charge scrapped
Double dip fuel surcharge to be scrapped
September 23, 2010

A fuel surcharge that forced some trucking companies to pay two lots of rates to sub-contractors for two years will be scrapped in 2011.

The NSW Industrial Relations Commission has decided to end the special fuel surcharge that applies to companies using the Transport Industry – General Carriers Contract Determination after an application from the Australian Road Transport Industrial Organisation.

The charge was introduced in 1990 in response to sharp increases in fuel prices due to the first Gulf War and required carriers to pay drivers a set rate depending on the vehicle being used.

It did not end when a new pricing determination was introduced in 2008 to deal with high fuel prices, leading Hugh McMaster from the NSW branch of the ARTIO to label it a form of double counting.

"The effect of this decision will be to stop principle contractors having to pay a fuel price surcharge which was introduced in 1990 and is now redundant," he says.

McMaster says the decision "represents a significant benefit to principle contractors" and will apply from January 1 next year.

The 1990 surcharge varies in price from 2.25 cents per kilometre for a rigid vehicle under two tonnes to 6.71 cents for a single drive prime mover. Contractors were required to pay an extra 7.29 cents to drivers of bogie drive prime movers.

"This special fuel price surcharge was introduced in 1990 specifically in response to extraordinary increases in fuel prices arising from the first Gulf War," McMaster says.

Unlike the fixed 1990 surcharge, the measure introduced in 2008 is based on the Australian Institute of Petroleum’s weekly average prices. McMaster says the market-based measure is fair and reasonable to contractors and sub-contractors because it reflects the market price of diesel.

Under the 1990 surcharge, parties reviewed the rate on a monthly basis.

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