Is A Fixed Fuel Contract Right for You?
Many of our customers are looking for a better way to forecast fuel costs, and locking in prices is a powerful budgeting tool to weather the unpredictable swings in the market. If that includes you, Woodhull Oil wants to offer you a guaranteed way to convert one of your most volatile costs to a fixed line item in your budget. Companies that want to guard against huge swings in operating expenses and protect bottom-line profitability often choose to benefit from a fixed-forward fuel contract.
Woodhull Oil has a fuel purchasing strategy to help our customers lock in their fuel at a set price.
A fixed-forward contract means you “lock in” a set price per gallon that is guaranteed throughout the contract period, regardless of how crazy the market behaves.
How Does a Fixed-Forward Contract Work?
Bulk fuel buyers who choose fixed-forward contracts often purchase around 40% to 70% of their projected fuel budget at a fixed price for the year, shielding themselves from uncontrollable price swings, while betting the balance of their budget on the constantly fluctuating prices that drive the market each day.
All you have to do is tell us how many gallons you want to purchase per month and then choose how many months you want the fuel delivered (anywhere from 1 to 12). We’ll do the math and guarantee a set price for those months.
A fixed-forward contract doesn’t mean you’ll pay the lowest price per gallon every day. Rather, you’ll benefit from a steady, even price, undisturbed by the market roller coaster.
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Accurately forecast your budget, and actually come in at or under it
Level the pricing playing field
Avoid unforeseen fuel costs
Smooth out your cash flow
Take away the daily anxiety of the market’s endless price swings
Enjoy a dependable supply of fuel
Protect your fragile profit margins
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The main drawback to fuel supply contracts is being locked into paying a higher price if fuel prices go down and stay down for a long period of time. This may or may not happen due to the unpredictability of fuel costs, so businesses are taking the risk of potentially paying more than if they were to purchase fuel on a monthly basis.
Another downside is the amount of fuel purchased also stays fixed. When you commit to a certain number of gallons and don’t end up using them all, you are still required to buy them from your fuel company.
However, if you buy too much fuel, don’t want to store it, and prices have increased (which they usually will), most fuel companies will happily buy back your extra fuel at the fixed price you paid so they can sell it to others at a new higher price.
How Can Woodhull Oil Help?
When it comes to how to save money on fuel, we tell you what other suppliers won’t, and we’re glad to do it. We’re pros at structuring fixed-forward fuel contracts and will design one that’s just right for your needs.
Call us today at 309-334-2153 to discuss your fuel requirements and how a fixed-forward contract can be a great bottom-line planning tool for you. We’re available anytime to answer your questions and get you the facts you need to make what can be one of the smartest business decisions you’ll make this year.