Fuel price surges followed geopolitical tensions involving Iran, driving operating costs up across Britain’s rail network. Railway insiders allege the Department for Transport repeatedly blocked operators’ attempts to lock in cheaper diesel prices through hedging. The department reportedly said hedging amounted to “gambling with taxpayers' money,” despite common hedging use in transport and aviation. TransPennine Express, state-owned, faces a potential diesel bill increase of up to 75% versus about £20 million last year. Industry figures warn the financial fallout may lead to higher fares, fewer services, or greater taxpayer subsidies as more operators move under state control, with franchise financial control expanded during and after Covid.
"“When DfT took on the financial cost risk from the Covid era onwards, they told us not to hedge,” the source said. “We've challenged that subsequently and always been told no as it's government policy not to hedge fuel.”"
#uk-railways #diesel-fuel-hedging #department-for-transport #transpennine-express #rail-fares-and-subsidies
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