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 in relation to fuel price volatility.
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 implementing a financial instrument with a third party hedge provider, or a fixed price via your physical supply contract.
You agree prices for a specified period of time with a hedge provider, essentially transferring your risk onto them, resulting in 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.
There are many types of fuel price hedge structures each having their benefits and suitability for companies with different requirements and different attitudes towards risk.
In order to assist you in arranging a fuel price hedge we would:
- Understand your business requirements and attitude to risk
- Jointly develop a hedging strategy which best meets your needs
- 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.
If you would like more information please get in touch.