When diesel prices move,
is your hedge working
for your business?

Diesel connects mines, farms, freight fleets and the businesses that depend on them. When its price rises sharply, budgets and contracts cannot always adjust at the same speed.

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September 2026 market context: US diesel prices exceeded an average of $6 a gallon amid disruptions to international fuel flows. The figure is a US price, not a global benchmark — but the wider lesson travels: a fuel price shock can reach an operating business long before it can recover the added cost from customers. Read more — Mining Weekly ↗

The Risk

The risk is asymmetric

A mine wants relief if diesel becomes more expensive. It does not generally need compensation if diesel becomes cheaper. The same is true of a farmer harvesting a crop or a freight operator fulfilling a transport contract.

A fixed price hedge can provide certainty, but it also fixes the economic outcome. If the market price falls, a loss on the hedge may offset the savings on the physical fuel purchase.

The business has protected its budget against a price increase while giving up some or all of the benefit of a price decrease.

An asymmetric strategy seeks a different balance: a response to damaging price increases while preserving greater participation in falling prices. Whether a particular strategy achieves that balance depends on its design, costs, timing and the relationship between its investments and the fuel price the business actually pays.

Alternatives Considered

Why not simply buy call options?

An option can give a fuel consumer an asymmetric payoff: it can gain value when the relevant price rises while leaving the buyer able to benefit if that price falls. But the option has a price.

Repeatedly buying protection can become costly, particularly when markets are volatile. A company also needs to choose the right fuel benchmark, size and maturity, then monitor and renew its positions as its requirements change. An option buyer can lose the premium paid if the protection expires unused.

Choose the correct fuel benchmark and contract size for the exposure
Monitor and renew positions as operational requirements change
Manage trading accounts, counterparties and internal controls
Accept the risk of losing the premium if protection expires unused

For some organisations, managing those decisions is a substantial undertaking. It is one reason to examine actively managed approaches rather than assume a single fixed hedge or option purchase solves every exposure.

The Right Framework

The question that matters

For corporate treasurers & procurement teams

The question is more precise than "Should we hedge diesel?" It is: What fuel price do we actually pay, where are we exposed to increases, and how closely could a proposed strategy respond to that exposure?

That structure can simplify access to the strategy for an investor. It does not eliminate the need to assess whether the investment suits a particular business's fuel exposure. An AMC's value may not move in step with the diesel price a mine or freight company actually pays.

Currency, local fuel pricing, timing, fees, liquidity and investment losses can all affect the outcome.

The Structure

Where Coherent and Orpheus fit

Two specialist organisations — one active strategy, one issuance infrastructure.

Fuel Strategy

Coherent Commodities

Led by Andy Pfaff, Coherent Commodities develops the specialist fuel strategy — designing actively managed approaches to fuel price exposure that target asymmetric responses to price increases while preserving participation in falling markets.

Review your fuel basis risk →

Issuance Infrastructure

Orpheus Capital

Orpheus Capital provides the issuance infrastructure that allows an actively managed strategy to be accessed as an Actively Managed Certificate (AMC) — a security with a Swiss ISIN, listed in Switzerland, that eligible investors may hold through established brokerage and custody arrangements.

AMC structure & documentation →

Next Steps