Lothian Buses hedges diesel bills

LOTHIAN Buses has signed a £1.4 million commodity risk management agreement with Clydesdale Bank to protect its exposure to fluctuating diesel costs by hedging 12 million litres of fuel.

With Middle East instability and a possible international oil shock, the deal will assist LB in reducing serious financial risks, bank officials said.

The deal is the first of its kind for Clydesdale. Norman Strachan, LB finance director, said: "Fluctuation in oil prices is one of the greatest risks we face.

At volatile times like these, it is vital to forecast overheads, ensuring fares are kept as stable as possible and that we minimise the likelihood of price increases being passed onto our customers."