Diesel Index Cap

This product is for Wholesale Customers only. 

The Diesel Index Cap is a fuel price risk management solution that allows diesel buyers to cap the base cost of their diesel purchases.

The price you pay for diesel fuel is dependent on many factors, including the Diesel Index, transportation costs, distribution costs, taxes, the wholesale/retail margin and the AUD/USD exchange rate. The most volatile of these is the Diesel Index and this is the component that is hedged using the Diesel Index Cap. Changes in Government taxes, transportation, oil company wholesale margin, retail margin and other costs, impact the pump price of diesel but are not managed as part of the Bank's Diesel Index Cap.

Our solution caps the Diesel Index (the Singapore Gasoil price in Australian dollars) at a given rate each month, in exchange for the payment of a premium.

The two scenarios are:           

• If the average Diesel Index for a month is higher than the strike price, then the Bank will pay you the difference. An increase in the average monthly fuel costs due to a rise in the average Diesel Index price is compensated by the Bank.                                           
• If the average Diesel Index for a month is lower than the strike price, then no payment will be made and you will benefit from the lower average fuel costs.

Benefits to your business

The Diesel Index Cap allows you to effectively manage the risk associated with fluctuating diesel prices, gives you more control over your cost base, improves cash-flow budgeting and management.

Accessing the Diesel Index Cap

• Discuss what offers are currently available on the Diesel Index Cap through consultation with your global markets specialist or the commodities team.
• The minimum quantity you can hedge per month is 25,000 litres in 1,000 litre increments. 
• Any other possible hedging solutions should be discussed with the commodities team.

Click here to view the Diesel Index Cap I (July to Dec 2006)

Click here to view the Diesel Index Cap II (Jan to June 2007)   

Click here to view the Diesel Index Cap III (July to Dec 2007)

Click here to view the Diesel Index Cap IV (Jan to June 2008)

Click here to view the Daily AUD Diesel Index

Important Information 
The information contained on this web page is made available only for persons who are Wholesale customers as defined in the Corporations Act 2001.