Bus Fuel Hedging Policy
Our bus fuel hedging programme uses fuel swaps to fix the price of our diesel fuel in advance. Our aim is to be fully hedged for the next financial year three months before the start of that year, at which point we aim to have also fixed at least 50% of the following year and 25% of the year after that. This hedging profile is then maintained on a quarterly basis.
Bus fuel accounts for around 12% of the bus division's cost base and we consume around 115 millions litres of fuel each year.
As at the last market update, our level of hedging and price in pence per litre is as follows:
| 2008 | 2009 | 2010 | 2011 | 2012 | 2013 | |
|---|---|---|---|---|---|---|
| % hedged | 50% | Fully | Fully | Fully | Fully | 25% |
| Price (pence per litre) | 34 | 43 | 47 | 41 | 41 | 42 |
| Usage (m litres pa) | 110 | 110 | 115 | 115 | 115 | 115 |
| £’m cost | 37 | 47 | 54 | 47 | 47 | 48* |
* Assuming hedging completed at same average price
+13.00p
