Respect In Business Blog

Save your business some money by hedging your fuel costs


Mandara is an outstanding, trading company who specialise in hedging and derivatives. They hedge the cost of oil for clients businesses that use a large amount of oil; they have a particular strength in hedging. They ensure that even if there are fluctuations in the price of oil, this will not have an adverse affect on their business. They only hire the most skilled workers, so they can provide a world class service to their valued clients.


madara oil hedgingOil hedging, is when firms who buy a significant amount of oil, can buy the oil at a set price for a set period of time. For this to work you would have to get the contract created, so you would always pay the current price of oil even in the future. So, if it was £3 a litre at the minute, you would pay that price until the contract ends. Even if the price changes outside of the contract, you still pay the price agreed on the contract. Oil hedgers can employ what is known as a short hedge, to lock in a future selling price for an ongoing production of crude oil. That will be ready for sale sometime in the future. So if the price of oil drops, hedgers will then make more money. Firms sign up with companies like Mandara, which helps the hedgers to make more money.


Companies hedge against the changing price of oil to save themselves money in both the long term and the short term. They do this because if they think oil is at a low price now, but it’s going to increase soon. They will hedge so they don’t have to worry about the amount they have to pay increasing.  However, the contract they make can last as long as or as short as they want, to allow them to decide more freely. Hedging oil derivatives is good for businesses like lorry companies, as they use a large amount of oil, so this can help to save them a lot of money in the future.


Over December the price of petrol has dropped from 107.55ppl to 102.89ppl, it fell by more than 4p. It reduces the cost of filling a family sized 55 litre car, for the sixth consecutive month, resulting in saving £2.02 on each tank. Currently some places are selling petrol for less than £1 per litre. Last summer, at Asda it cost 132p for a litre of petrol but now costs 109.7 per litre. It dropped by a surprising amount, because all though the amount is small it adds up and can save you a lot of money.


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