Tariffs Are Here. Is Your Business Prepared?
The fuel market is presenting a rare opportunity. Gas oil (red diesel) prices are currently hovering near four-year lows (Farmers Weekly), with the potential to lock in 12-month pricing close to 55p per litre. For businesses reliant on fuel, this is a pivotal moment to secure cost stability and mitigate future volatility.
What This Means for UK Businesses
For industries that rely on fuel, such as logistics, construction, manufacturing, and waste management, these price shifts create both opportunities and risks. While lower prices may ease current operating costs, markets remain highly unpredictable. Locking in pricing at current lows could be a strategic move to avoid exposure to future price spikes.
Why Are Prices Dropping?
U.S. Tariffs Announcement
The U.S. has imposed sweeping new tariffs, including a 10% minimum tariff on most imported goods and significantly higher duties on products from China (34%) and the European Union (20%). China has reciprocated by imposing an additional 34% tariff on US goods. While oil, gas, and refined products are exempt, the broader economic concerns surrounding a potential global trade war have raised fears of slowed economic growth and reduced energy demand.
OPEC+ Production Increase
Eight OPEC+ countries, including Saudi Arabia and Russia, have agreed to accelerate their planned oil output hikes, adding 411,000 barrels per day to the market in May – far exceeding the initially planned 135,000 barrels per day. This unexpected surge in supply has put further downward pressure on fuel prices.
How Can You Lock In Pricing and Manage Risk?
Attara’s fuel desk works closely with UK businesses to manage their exposure to fuel market fluctuations. We provide tailored risk management solutions that run alongside your existing procurement methods, ensuring price stability without disrupting day-to-day operations.
Our solutions include:
Swaps: Secure a fixed fuel price for a specified period, with settlement payments based on the difference between the agreed price and the market price at the end of each month.
Options: Gain the right, but not the obligation, to buy fuel at a predetermined price, offering flexibility to hedge against unexpected market movements.
Thomas Ricketts
Head of Fuel
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Industries We Support
Our hedging strategies benefit businesses in sectors such as:
– Logistics
-Fuel providers & distributors
-Farming
-Retail & Waste Management
-Manufacturing
-Civil Engineering
-Utilities
-Aviation & Maritime
Act Now to Take Advantage of Market Lows
With fuel prices at a multi-year low, the opportunity to secure cost certainty won’t last forever. Taking proactive steps now can protect your business from future volatility, ensuring more predictable cash flow and operational stability.
