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FPA's knowledge of the fuels market and the various price hedging mechanisms has proved to be invaluable.

 

William Moore, Procurement Manager, Translink

Fuel Price Risk Management

An effective price risk management policy forms an intricate part of any fuel procurement strategy.  We have extensive experience of working with clients to develop an appropriate strategy which addresses both their operational requirements and the potential risks to their business from movements in the price of fuel

We can help you : 

  • Evaluate the risk relevant to your business from adverse market movements
  • Understand price trends and market conditions
  • Determine the most appropriate pricing structure
  • Facilitate the implementation of your price hedge strategy

 

How does a Fuel Price Hedge work?

Hedging allows you to minimise your exposure to fluctuations in the wholesale price of fuel by taking out a financial instrument with a third party hedge provider.  

You agree prices for a specified period of time with a hedge provider, essentially transferring your risk onto them,  allowing you budget certainty for your business.   There are many types of fuel price hedge structures each having their benefits and suitability for companies with different requirements and different attitudes to risk.  

In order to assist you in arranging a fuel price hedge we would : 

  1. understand your business requirements and attitude to risk
  2. jointly develop a hedging strategy which best meets your needs
  3. identify appropriate hedge providers who are able to execute your requirements

Once your hedge is in place, we can then support you with the monitoring of its performance and the validation of your monthly settlement statements.

 

How often can I take out a Fuel Price Hedge?

The answer is as often as you require.  It is not linked to the physical supply of your fuel but looks simply to manage your future price risk exposure.  We will help you monitor the market and when the price reaches your financial targets we will assist you with the conclusion of any resultant trades. 

 

TESTIMONIAL : Financial Hedging for Translink

William Moore, Procurement Manager, Translink says “We have worked with FPA over a number of years to assist us in developing an appropriate strategy for managing our exposure to fuel price fluctuations."

He continues "This has involved facilitating the setting up of accounts with appropriate financial institutions and execution of the final trade. Their knowledge of the fuels market and the various price hedging mechanisms has proved to be invaluable.” 

Company Reg: 3259687. Reg Address: FPA Consulting Ltd, 1 St Andrew's House, Vernon Gate, Derby, DE1 1UJ. First Energy Solutions and First Quality Solutions are divisions of FPA Consulting Limited. 01332 604 321

© FPA Consulting 1997 - 2016.

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