Insights offered on fuel hedging

Posted on October 31, 2010

PORTLAND, Ore. — The process known as fuel hedging can provide school bus operations with predictability for their fuel budgets, according to a presentation here at the annual state directors conference.

Charley Kennington, former state pupil transportation director for Texas and now director of Innovative Transportation Solutions, described fuel hedging as a way of protecting against price increases, which have been particularly steep in recent years.

In utilizing the process, a school bus operation would enter into a contract of up to 24 months with a fixed price for their fuel. To allow for some flexibility, Kennington said his agency doesn’t recommend putting 100 percent of the operation’s fuel into the hedging program.

The operation then continues to buy its fuel as usual through its supplier, paying the market price. If it rises above the fixed price in the contract, the operation will receive a check for the difference. If the market price falls below the contract price, the operation will be billed for the difference.

For the duration of the contract, the operation will know exactly how much it will pay for the quantity of fuel it put into the project.

“It provides budget certainty,” Kennington told the National Association of State Directors of Pupil Transportation Services.

Kennington and his agency have worked with some Texas school districts on fuel hedging. He also noted that Southwest Airlines has been doing it for decades.

Look for more details on fuel hedging in an upcoming issue of SCHOOL BUS FLEET.


Related Topics: NASDPTS

Comments ( 1 )
  • Naveen Agarwal

     | about 7 years ago

    For school bus fleets, we offer a personalized online service (visit to buy fuel price protection easily at a very competitive price. You can email us at [email protected] for an in person consultation as well. Our service allows schools to focus on education and transportation and not worry about cost of fuel, which tends to be very volatile.

More Stories
In a video from Wichita Public Schools, a First Student training manager explains what it takes to become a school bus driver as the local operation looks to bring new recruits on board.

Dealing With Driver Shortage Is Still a Big Deal

There are other commercial driving jobs that pay more than driving a school bus, but they don’t involve transporting students. The opportunity to contribute to children’s education and safety could spark interest in the job.    


Great Ideas Abound on the Bus

Great ideas come in many forms. What all of these innovations have in common is that they promote the role of school buses in student achievement.


School Bus Driver Teaches Students to Fish

Gary Kelmer of New Jersey invites students he transports to a local pond on spring break to teach them how to fish and get them to spend time outdoors. He has offered the activity for over 20 years.

Be the First to Know

Get the latest news and most popular articles from SBF delivered straight to your inbox. Stay on top of the school bus industry and don't miss a thing!