Cabinet 'approved' hedging deals

[VIDUrUVAN123]

CBSL Governor, Ajith Cabraal
CBSL does not deny advising the government to hedge oil purchases
Central Bank of Sri Lanka (CBSL) says that the controversial hedging deals on purchasing fuel were approved by the Cabinet of Ministers.

In a statement issued on Friday, the CBSL says the Cabinet granted approval to hedge purchase of petroleum products on 13 January 2007.

The CBSL was responding to allegations by Petroleum Resources Minister AHM Fowzie that the concept of hedging was initially suggested by CBSL Governor, Ajith Nivard Cabraal.

Source/More.................

 

[x-pert]

Hedging was a good deal if the crude oil prices kept on increasing.

But since the prices got reduced, it has back fired.

overview of hedging deal is something like selling fuel for the same price for a particular period.

So as you can realise, if the prices kept on increasing, CPC would have sold fuel for the same price (i.e. without increasing the price)
But now, since they have never forcasted a price fall in crude oil, they have to sell fuel for higher prices due to the deal...

 

[bundy123]

 

[Shaggy70]

MmmmmmmmMmmmmmmm

 

[sherlock]

thanx 4 da news