RAF and fuel...

[harrogate]

Hi.

Asked this in another forum elsewhere, but not got an answer as yet, so thought I'd try my luck here...

Does the RAF or the MoD at large engage in a bit of fuel hedging?

I'm more than clued up on the civvy side of stuff, but never really looked into how the forces do it, if at all. Are they even permitted to?

I read yesterday that a lot of the big airlines are currently using fuel bought at $85ish a barrel, so when this $135 a barrel stuff that coming out of the ground now hits the market, things are gonna go ape****.

The implications for our skint forces must be even more grave, right?

If they don't hedge their fuel, I for one won't be flying with them to Magaluf this year. That's for sure.

[Pontius Navigator]

I would speculate that the answer is no.

The MOD self-insures, it could lose if the market went against it. The whole supply system is predicated on 'just in time' which is why there was insuffuicient kit for GW2.

I do remember we used to 'buy' fuel at the cheapest place. Once a Nimrod was instructed to depart from Norway on minimum fuel to avoid both the costly uplift and the extra subsistence of an extra night stop because of wx.

However the aircraft was already fully fuelled and they ran out of crew duty time while the head shed was trying to save a penny.

[harrogate]

Cheers, chap. Much too prompt for a Sunday morning. Shame on you.

I suspect not too, but we all know how much Gordon likes to try and make savings (and then balls up everything in the process).

Mind you, I bet he still taxes the arse off MoD-bound fuel, just for kicks.

Old habits, etc.

[Gnd]

The other point is we have no where to store it, just enough just to late normally!!!!

[harrogate]

So, when you've bought it at that rate, you have to take it immediately and store it yourself?

I was under the impression in the civvy side of things that they can draw off much of the fuel they paid up-front for whenever they wish, even though some of them do store certain amounts at their own/leased facilities.

[forget]

The implications for our skint forces must be even more grave, right?

Wrong. Any increase in military fuel costs to the MoD/Governent is more than off-set by the increase in non aviation VAT revenue, to the Government, caused by the by the increase in fuel costs etc etc etc .......

[Tourist]

Yes Forget, because Gordon sends that tax revenue straight back to the MOD doesn't he, oh no, he doesn't, does he....

[harrogate]

Yeah, I understand that the vast majority comes back to the government, but with **** like Northern Rock to pay for, Gordy's not exactly going to spend it on trivial stuff like putting fuel in expensive fighter jets that he doesn't want in the first place.

It's the incompetent and frankly dis-interested human link in that process that lets it down. For the money to come full circle back to the MoD it has to pass through the scrutiny of bean counters at the last hurdle, before being redistributed.

Invariably it gets deflected off towards paying for something like extortionate day rates for IT firms working on a £40bn computer system for the NHS that will be 5 years out of date by the time it's fully rolled out.

I know I'm simplifying and paraphrasing the NHS thing there, and obviously the NHS does need massive investment, but sooo much money is wasted on stuff like this. I've seen wastage in the NHS on a unbelievably huge scale with my own eyes in years gone by when I worked briefly for a DoH department .

[Pontius Navigator]

I am not aware of any fuel cut backs at the moment and it would be a brave man to cut operational training with the present tempo of ops and the need to bring Tornado and Typhoon up to FOC in Afg.

In the past, when it was only the cold war we certainly had fuel shortages that translated into a cut in flying hours to the bare minimum. Extended Christmas holidays was one way round the problem. Give the troops 3 weeks rather than a week and you save tons of the stuff.

As for buying forward, I am sure some such arrangements might be possible. In Singapore the fuel was 'owned' by Shell however they promised the supply of millions of gallons per day if required. It would be a simple accountancy matter to 'buy' it at a given price.

[Toddington Ted]

On the subject of fuel, particularly Avtur and diesel (the so called products of "sweet oil"), we are all well aware of recent price increases at the pumps etc but this is just the start, regardless of government taxation. Clearly oil supplies have either reached "peak oil" or will do soon. Some clever sounding chap on Radio 4 the other day said there won't be sufficient energy to get any more oil out of the ground (ie it won't be economically viable) by as early as 2013 (!). I presume loads of clever people are working away to think of alternative ways of powering all our military aircraft because if they aren't then we could all be going on ops in gliders and steam powered tanks! :uhoh:

[Brakes...beer]

Blimey... don't tell the MOD about hedging, let alone Gordon the Gold Merchant. Before you know it they'll have secured a bargain contract for the next ten years at $200/barrel.

[VinRouge]

Well, to be fair to Gordy, $200 a barrel is where a lot of economists are predicting oil to be BY CHRISTMAS if speculation, in combination with further US/Eurozone rate cuts continue.

By the way, that equates to £2 a litre of diesel. Many at work laughed when I said oil could reach $1.20 a barrel, many expected oil to come off its "peak" after $90.

Think I will get by tin hat out and bunker up with my supply of rice,beans, pemmican and a machine gun....:}

Inflation at an all-time low my arse... :=

[NutLoose]

Cough.. Cough...So I take it banging a 10 on a round the world Nav Ex to burn off the remaining yearly fuel budget is a thing of the past...........:p

[harrogate]

I am not aware of any fuel cut backs at the moment and it would be a brave man to cut operational training with the present tempo of ops and the need to bring Tornado and Typhoon up to FOC in Afg

Or a f*cking moron. We have plenty of those in government.

But I wasn't suggesting the implications would manifest themselves as fuel cut backs any way. More likely the cutbacks will be made elsewhere within the military.

[Wader2]

Or a f*cking moron. We have plenty of those in government.

But I wasn't suggesting the implications would manifest themselves as fuel cut backs any way. More likely the cutbacks will be made elsewhere within the military.

No, no, fuel and flying hours are easy hits and instant returns.

Cancel Project X and you save money you haven't got inthe future but you put lots of jobs at risk. Hit the flying hours and you get instant gratification.

[Mad_Mark]

VinRouge...

Many at work laughed when I said oil could reach $1.20 a barrel

I don't blame them, I would have laughed too :D

I think you need to move your decimal point :ok:

MadMark!!! :mad:

[KeepItTidy]

Did Gibralter hold a lot of war reserves of fuel within the mountains

Or have I just given away the British war plan to invade Spain :E