Top 10 Misconceptions About Fuel Hedging

"Fuel hedging is way too risky for us. It's like gambling. We aren't Southwest Airlines."
We've seen fuel prices move 70-80% in just a few months. Having your business exposed to such a volatile commodity is risky. A good fuel price protection plan provides relief when gas prices are high, and you continue to benefit from lower prices when gas prices fall. Having your fuel expenses capped is a great way to reduce fuel cost risk to your business.
"We believe prices will fall."
No one-not even the experts-can accurately predict fuel prices. The entire purpose of capping your fuel costs is to control unpredictable fuel prices so you can protect your profits and focus on growing your business.
"My company doesn't use enough fuel."
It doesn't matter how much fuel you use but rather how significant a cost it is for your business. You can now protect any volume of fuel whether you have two vehicles or thousands of vehicles in your fleet. See how one of our smallest clients benefited.
"We are coming up with a plan to pass fuel costs along to our customers."
Competition for business is fierce today so passing along fuel costs-whether through higher prices or higher fuel surcharges-can hurt your business. In fact, many companies with fuel surcharges are now capping their surcharges to appease their customers and win more business.
"It is way too complicated for our organization."
Capping your fuel costs is easy: you simply set your protection price, monthly gallons, protection term and type of fuel. You get paid the difference when the national average fuel price rises above your set protection price. There's no change to how you purchase your fuel, no receipt tracking and no hassle. Learn more.
"We don't hedge because our competitors don't do it."
Don't assume you know what your competition is doing. More and more companies are hedging their fuel budgets and have told us they consider it a secret competitive advantage.
"We don't understand the accounting behind hedging."
You don't need to. If you are a large and/or public company Pricelock's team has over 70 years of commodities and hedge accounting expertise to help you create ASC 815/FAS 133 compliant fuel price protection programs.
"I've approached the owner/CEO about this and they're not interested."
In many instances, it comes down to the owner/CEO not being familiar with fuel hedging. With recent innovations in fuel hedging, many don't realize that stabilizing what was always a hugely variable cost has never been easier and more effective.
"We did that once and got caught on the wrong side of the trade."
Fuel hedging with caps is different. Capping your fuel costs is the safest way to protect your fuel budget. You get paid when the national average fuel price rises above your set protection price. When fuel prices fall you benefit from lower prices at the pump.
"We only want to hedge if we are sure that prices are going higher."
Fuel prices are volatile by nature; however, we know that fuel price movements catch companies off guard time and time again. Stay on top of fuel prices by signing up for our monthly fuel news.
See how these companies have been able to grow their business without worrying about volatile fuel prices.