Rules for calculating the BAF fuel additive

BAF means what?

The abbreviation on the valuation of cargo transport sometimes introduces importers and principals into a slight embarrassment. To dispel any doubts, we explain. BAF is an abbreviation for Bunker Adjustment Factor. It means exactly an addition, a fuel correction introduced by transport and forwarding companies to the price of freight.

Why is this happening?

The TSL industry depends to a large extent on the cost of purchasing diesel oil. And this, as is well known, is subject to fluctuations resulting from the economic situation on the market. Unfortunately, the current one brings us constant changes. Thus, the fuel adjustment reflects the fluctuations of fuel prices in the settlement of transport services - the percentage difference in the current fuel price in relation to the base price.

How is the BAF calculated?

Each transport company internally determines how the allowance is calculated. In Daw Trans, the allowance is calculated according to the formula: Current price/Base price - 100%

BAF calculation rules in Poland.

The national BAF in Poland can be counted in a daily, weekly or monthly cycle. It is calculated on the basis of Orlen Spot net prices officially published on the website: https://www.orlen.pl/pl/dla-biznesu/hurtowe-ceny-paliw#paliwa-archive. Missing days in the list are supplemented with the price from the previous day. Therefore, if the time interval is longer than the daily one, the arithmetic average of prices from a given period (e.g. week, month) is calculated and compared to the average from the same period designated as the base price.

The percentage difference in the price of fuel translates into fuel adjustments according to the table below of the supplement/discount to the VAT invoice.

Rules for calculating the foreign general BAF.

The general foreign BAF, similarly to the domestic BAF, can be calculated in various time intervals, except for the daily cycle. Calculations are prepared on the basis of the Weekly Bulletin of Fuels published by the European Commission. The bulletin is available at the following link: http://ec.europa.eu/energy/observatory/reports/Oil_Bulletin_Prices_History.xlsx

The file has a wide data structure, therefore the general foreign BAF is based on the average gross price of the Eurozone countries (prices with taxes, Eurozone). The average price from the specified period is compared to the corresponding price from the previous period according to the base price arrangements.

The percentage difference in the fuel price translates into fuel adjustments according to the table below of the supplement/discount to the VAT invoice: