Local giants suffer heavy losses from fuel hedgingSome major firms such as Vietnam Airlines and Petrolimex have incurred hefty losses since 2014 due to fuel hedging contracts, according to a report on audit results of 2016 released recently. Vietnam Airlines in 2014 signed four fuel hedging contracts that lasted until 2015 and had to offset a loss of nearly VND2.58 trillion (about US$112 million) when the fuel price tumbled. Meanwhile, Petrolimex Singapore Pte Ltd, a subsidiary of Petrolimex, lost US$38.23 million in 2015 due mainly to fuel hedging contracts signed between September 10, 2014 and December 11, 2014. Therefore, large enterprises whose production and business costs greatly depend on fuel prices have started to sign hedging contracts in recent years as a risk-averse measure. From June 2014 to October 2014, crude oil prices have fallen by US$25 a barrel and continued to edge lower in the years 2015 and 2016.

Source: VietNamNet News May 23, 2017 16:41 UTC