TREE's capacity to efficiently manage the risk inherent in physical fuel trading is central to FūelBank's growth and stability.
Financial, operational and market risks are an integral element of physical fuel trading, distribution and supply. Appropriately planning & managing the logistics inherent in the purchase, sale and distribution of physical fuel stocks are a vital component to the success sought by our customers. TREE maintains sophisticated risk management systems, processes and controls. Risk policies are determined centrally, exposures are analyzed daily, and our procedures are continuously reviewed and updated.
FūelBank applies a range of risk management tools to minimize overall exposure at any one point in time. These include:
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Financial derivative instruments to hedge discounted fuel pricing
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Insurance to hedge various operational risks including freight-related and political risks
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Due diligence prior to acquisition and good management after acquisition to hedge environmental risks
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Ready access to sufficient capital and funding to hedge liquidity risk
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Strict policies and procedures to hedge counter-party relationships, fraud and regulatory risks