Fuel hedging is a way for companies in to protect themselves from changes in fuel prices. Think of it like buying insurance for the price of fuel. Companies use financial tools (like futures and options contracts) to agree on a set price for fuel in the future. This helps the company plan their budget and avoid big surprises from sudden price swings.
In simple terms, fuel hedging helps companies avoid financial risk related to fuel costs.
The problem is that the minimum amount required by hedge managers is 100k + management fee, which makes this product unaffordable for SMBs.