The benefits of hedging

Morten Rudebeck Henriksen, Senior Oil Risk Manager at Global, lists the 5 greatest benefits of hedging against fuel price risk.

1. Stabilise your cash flow and protect your margins

Efficient risk management strategies protect your budget and profit margin, turning volatility into opportunities.

2. Mitigate the effects of fuel price increases

Keeping fuel costs within a predictable range protects you from unexpected changes in the cost of fuel.  Fuel price hikes can otherwise seriously impact your bottom line – or even surpass your expected earnings.

3. Time to focus on your core business

Hedging against fuel price volatility is not easy. Employing the expertise of a fuel price risk management partner allows you more time to focus  on your core business.

4. Gain a competitive edge

Proactive fuel risk management can help stabilise prices along your supply chain – a potentially deciding factor between failure and success for marginal businesses.

5. Create a positive perception among your stakeholders

Investors tend to prefer companies that produce a steady, controlled growth in earnings. Bankers place high value on effective risk management, which can put you in a better position to negotiate improved financial conditions.