Fuel Escalation Clause Sample Clauses
A Fuel Escalation Clause is a contractual provision that allows for adjustments to the contract price based on fluctuations in fuel costs. Typically, this clause specifies a baseline fuel price and outlines a formula or method for recalculating payments if actual fuel prices rise or fall beyond a certain threshold during the contract period. By including this clause, parties can fairly allocate the risk of volatile fuel prices, ensuring that neither side bears an undue financial burden due to market changes.
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Fuel Escalation Clause. Contractor and MSD acknowledge that the price and fluctuations in price of fuel have a direct impact on the cost of transportation and on the total compensation to be paid to Contractor under this Contract. For all fuel (gas, propane or diesel) purchased by Contractor for this Contract, the price paid per mile shall be adjusted effective the first day of the month following a change in the actual cost of fuel purchased by Contractor. For transportation, the price per mile per bus per route shall be calculated and provided to MSD. Thereafter, an adjustment of one cent per mile shall be made for each five cent per gallon increase or decrease in the cost of fuel (gas, propane or diesel floor of $4.00 per gallon). The Contractor shall submit to MSD each month the amount of miles driven in the preceding month with a calculation of increased cost of fuel incurred if any during the preceding month for each bus for each route. The base price for purposes of this calculation shall be established at $4.00 per gallon for fuel, the maximum decrease in fuel escalation cost will not exceed the established rate per gallon (no credit will be awarded). Receipts indicating the most recent cost paid by Contractor for fuel purchases shall be submitted monthly to substantiate the adjustment.
Fuel Escalation Clause. No fuel surcharge