- Lightning Coach is a coach operator using 100,000 litres of Diesel per month in the summer months, when trade is at its busiest.
- It is critical to Lightning Coach that they do not pay more than 92ppl in June and July, but they also want to take advantage of any falling fuel prices in those same months.
- Therefore Lightning Coach buys a fixed price of 92ppl in advance and pays Portland a 1.00ppl fee per month (£1,000) up-front.
- Lightning Coach buy their fuel in the normal way (direct from their fuel supplier or with cash / card at a forecourt) and in June, the diesel price actually drops to 89ppl but Lightning pays Portland nothing as they chose the Premium product which requires a one-off, up-front fee.
- However in July, the diesel price rockets and the average price for that month is 94ppl. Therefore, Portland pays Lightning Coach £2,000. This is based on 2 pence (94ppl minus the agreed 92ppl) multiplied by 100,000 litres for the month of July.
Once again, you buy and pay for your fuel in the normal way. Portland simply carries out a reconciliation on the price at the end of each month. Remember also that Portland Fuel Price Protection can offer fixed prices on a weekly basis if this better suits the customer’s fuel purchasing patterns.