Question submitted by Board Member Arish Gajjar.
Answer: DASH does not currently utilize a traditional fuel hedging program. In the past, staff explored fuel hedging opportunities; however, our current fuel vendor structure instead allows DASH to lock in pricing for two-week periods based on OPIS market pricing. While this approach does not provide the long-term price certainty associated with formal hedging programs, it does offer limited short-term protection against rapid market fluctuations while maintaining purchasing flexibility.

Staff has also evaluated alternative regional approaches to fuel procurement and risk management. The City’s Fleet Division does not hedge fuel, but instead participates in a Metropolitan Washington Council of Governments (MWCOG) cooperative fuel contract. Upon review, DASH determined that pricing available through the MWCOG contract has generally been higher than the rates DASH currently pays on a per-gallon basis. Staff also researched emerging market-based forecasting and prediction tools that have been discussed as potential hedging mechanisms in other industries; however, due to legal, regulatory, and policy considerations surrounding the use of public funds in such markets, these approaches were determined to be unsuitable for DASH at this time. DASH has been in discussions with GRTC in Richmond to better understand the structure of their fuel procurement strategy and related contract terms. As fuel markets stabilize and pricing conditions become more favorable, DASH plans to further explore alternative vendors and the potential issuance of an RFP for a fixed-price fuel contract or other pricing stabilization mechanisms.

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