Fuel deal cuts diesel prices for farmers

An innovative purchasing initiative for fuel by East Anglia-based buying group AtlasFram has achieved savings of almost 10pc in fuel costs.

The scheme to encourage members of the co-operative to forward-order red diesel (gas oil) for delivery during the harvest period has produced savings.

Graham Aldrich, energy specialist for the AtlasFram Group, which purchases 45 million litres of fuel annually on behalf of its 1,250 members throughout the UK, said: 'Previously, farmers have had very few opportunities to purchase fuel on a forward, fixed-price basis. Therefore they have had to purchase fuel as and when they have needed it at the prevailing 'spot' market price, whatever that might be on the day of ordering.

'However, the recent high levels of fuel price volatility have created a surge of interest from members looking to forward-purchase their expected requirements at a known cost and with guaranteed delivery.

'AtlasFram evaluated a range of innovative options involving a number of large national and regional fuel suppliers before contracting with the UK's leading oil and liquefied petroleum gas sales, marketing and distribution business.

'The agreement allowed members to order a specific volume of fuel, at a specific price – 63.79p per litre (ppl) –for delivery in July, August and September.

'Prices on the spot market have subsequently increased by 6ppl due to a number of factors. Outages at refineries in the United States, measures to boost China's economy and increased speculation have all contributed to a tightening of the balance between potential supply and demand, which has driven the market higher.

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'The late start to this year's harvest further increased the pressure on fuel distributors during an already very busy time.'