LOSSES * UK - £200m hit for bus firms as fuel hedging backfires
Firstgroup and Stagecoach suffer as oil prices slide after they fixed costs around $115 per barrel
Glasgow,Scotland,UK -The Sunday Herald, by Steven Vass -18 April 2009: -- Firstgroup and Stagecoach, the two leading transport companies in Scotland, will lose about £200 million between them this year because they fixed their fuel costs at levels well above current market prices... To the detriment of rail and bus passengers, who have seen fare hikes around the country in recent months, the two companies locked in large parts of the fuel purchases for this year and next year at a time last year when there were fears that the price of oil could hit $200 a barrel... The Sunday Herald estimates that FirstGroup is paying about 25p more per litre of fuel than necessary this year, while Stagecoach is paying about 17p too much. Another rival, Arriva, is paying about 13p too much, which indicates that FirstGroup hedged at a particularly unfortunate time...Labels: losses
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