Portland Fuel Price Protection
fuel, Fuel Costs
- "Roadway Plant Hire" is a plant and equipment operator using 100,000 litres of Gasoil (Red Diesel) per month. They are looking to fix their costs on a portion of their fuel consumption.
- They decide they would like to fix the price of 50% of their monthly volume consumption for the next 3 months, ie, 50,000 litres in Month 1, 50,000 litres in Month 2 and 50,000 litres in Month 3
- They agree a price of 43ppl (including duty) with Portland Fuel Price Protection for the 3 month period.
- The Portland Standard service requires no up-front fee.
- Roadway Plant Hire continues to buy their fuel in the normal way from their usual fuel supplier(s).
- In month 1, the average price of gasoil turns out to be 44ppl so Portland pays Roadway Plant Hire £500. This is based on 1 pence (44ppl minus the agreed 43ppl) multiplied by 50,000 litres.
- In month 2, the average price of gasoil turns out to be 46ppl so Portland pays Roadway Plant Hire £1,500. This is based on 3 pence (46ppl minus 43ppl) multiplied by 50,000 litres
- In month 3, the price of gasoil falls back to an average of 42ppl. Because, Roadway Plant Hire have agreed to pay 43ppl, they must pay Portland the 1ppl difference, ie 1 pence x 50,000 litres = £500.
- Over the 3 month period, Portland Fuel Price Protection has saved Roadway Plant Hire £1,500.
Remember that Portland does not get involved in the physical purchase of fuel. You continue to negotiate with your fuel suppliers, receive the product and pay their bills in the normal way. We simply credit or debit the difference between what is paid versus the agreed Portland price.
, Fuel Costs