BIZ BUZZ: Fuel hedging is here
While most Filipinos are stressing over spiking fuel prices amid the war in the Middle East, some businesses are just chilling, with their prices—and, well, peace of mind—already locked in.
Before the two consecutive rollbacks, gasoline and diesel prices in Metro Manila were tracking as much as P120 and P170 per liter—far from their pre-war levels of just about P50 to P70 per liter.
And although many still brace for uncertainties in price movements, a few fuel retailers are keeping things predictable.
The number of oil firms offering hedging is not confirmed, but Seaoil is publicly enticing businesses to “secure better rates and operate with less uncertainty.”
Launched during the pandemic, in partnership with fintech company LOCQ OPC, Seaoil has been providing a fleet management solution that allows enterprises to lock in fuel prices while they are low, store them in a virtual tank and gas up at Seaoil stations even with elevated prices.
Biz Buzz asked for more details, but Seaoil did not respond.
Other industry players, meanwhile, said the strategy is meant to manage volatility.
Brigitte Carmel Lim, senior vice president and chief operating officer at Top Line, said the Cebu-based fuel firm provides a similar offer to its customers, saying this is “helpful for businesses in terms of cost predictability.”
In a separate message, Jetti Petroleum president Leo Bellas said this could also meet the volume requirements of businesses.
“However, it’s important to clarify that price hedging is different from supply security. While it can protect against price fluctuations, it does not necessarily guarantee physical supply,” Lim told Biz Buzz.
“Supply availability still depends on actual inventory levels, logistics and global market conditions,” she added.
But the good news is that the Philippines is not experiencing any immediate supply shortage.
“Industry players maintain inventories in line with DOE (Department of Energy) requirements. The current concern is more on price volatility rather than physical disruption,” Lim said.
As of April 17, the local market had about 52 days’ worth of fuel inventory.
Filipinos saw another round of fuel rollbacks this week.
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