Question to the Ministry of Defence:

To ask the Secretary of State for Defence, what his Department's current fuel hedging arrangement is.

The Ministry of Defence (MOD) undertakes substantial purchases of fuel commodities. Exposure to fluctuations in the market prices of these commodities is hedged to obtain budget certainty on price rather than seek speculative gains.

The Department hedges up to three years in advance and usually trades quarterly to further spread price risk. This approach has been used for fuel hedging since 2010.

Information on the volume of fuel procured by the Department is not centrally held but in Financial Year 2015-16 the MOD procured approximately £356 million of fuel and consumed £333 million of fuel.