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Price Index (Fuel and PGAC)

July 18, 2022

Perhaps one of the most useful resources through this time of inflation is MTO's Fuel Price Index and PGAC Price Index developed from years of expertise as one of the largest infrastructure investors in the world. Like many MTO resources, it is available to all municipalities free of charge. 

MTO has a fuel price adjustment clause in their contracts to help alleviate the risk of a fluctuating fuel costs on contractors performing work for the ministry. The inclusion of this clause in MTO contracts eliminates the need for MTO Fuel Price Index Guides Your Contracts Through Inflation any change order during construction to account for the fluctuation in fuel pricing in regards to how it may affect tender prices of the bid items.

The following is a brief outline of the key points in regards to their fuel price adjustment: 

  • MTO adjusts the payment to contractors working on Ministry construction and maintenance contracts based on changes to the fuel price index (FPI) to address the risk of fuel price increases/decreases throughout the life of a contract.
  • Fuel price adjustment requirements are specified in all Ministry tenders for Design-BidBuild contracts, in MTO’s General Conditions of Contract (OPSS.PROV 100 – GCs).
  • The ministry calculates and pays fuel cost adjustments on a monthly basis as a percentage adjustment on the applicable items. 

To read more CLICK HERE! and scroll to page-4 of the MEA Newsletter

MTO has been publishing its Asphalt Cement Price Index for a number o f years and it is accepted by the provincial government, municipalities, and the paving industry as an accurate, authoritative and independent benchmark o f current asphalt cement pricing in Ontario. It i s important to note that the A/C price index does not reflect the actual price of a tonne o f asphalt cement at any given time. It i s an index that reflects the increases and decreases in the price over time. 

The Ontario Road Builders Association has prepared an example contract language to facilitate contractor/owner transactions when it comes to fluctuating hot-mix asphalt prices. CLICK HERE! to access the article