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Get more margin and less risk

Keeping fuel costs within a predictable range protects you from unexpected changes in the price of fuel. Changes that could otherwise seriously impact your budget and profit margin.

Caps

A Cap is a paper hedge agreement designed to protect you from rising prices, yet allows you to benefit from falling prices. Also known as "call option".

Two good reasons to use this strategy:

  • Rising fuel prices would seriously undermine your business
  • You would like to benefit from falling prices after having fixed your maximum fuel prices

Benefits Disadvantages
Protection from price increases Premium upfront
Benefit from falling fuel prices Potentially some basis risk
Flexibility in physical supply  

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