• Premium paid up-front
• Price capped from 1 month to 12 months (ie, customer never pay more than capped price)
• All grades of fuel covered
  (Diesel, Petrol, Gasoil, Jet A1, Fuel Oil, LPG)
• Portland does not buy the fuel – customer sources fuel in usual way
• Volume and capped price set by customer

Worked Example

• Demolition Derby plc is a plant and equipment operator using 50,000 litres of Gasoil (Red Diesel) in the summer months, when trade is at its busiest.
• It is critical to Demolition Derby that they do not pay more than 55 pence per litre (ppl) in June and July, but they also want to take advantage of any falling fuel prices in those same months.
• Therefore Demolition Derby buys a capped price of 55ppl in advance and pays Portland up-front a 1.50ppl fee per month (1.50p x 50,000 = 75,000 pence = £750 in both June and July)
• In June the average price actually drops to 53ppl. Demolition Derby pay nothing because they chose the Premium product which requires a one-off, up-front fee. Portland pay nothing as the 53ppl price is lower than the agreed 55ppl capped price.
• However in July, the Gasoil price rockets and the average price for that month is 59ppl, 4ppl higher than the capped price. Therefore Portland owes Demolition Derby 4ppl and pays them £2,000 accordingly (50,000 litres x 4p = 200,000 pence = £2,000).

Once again, the client buys and pays for fuel in the normal way, from their usual fuel supplier or via fuel card. Portland simply carries out a reconciliation on the agreed price at the end of each month.

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