No, for a couple of reasons.
One, because only a portion of our fuel expenses are hedged. As of today's conference call, our remaining fuel for the year has been 50% hedged at an equivalent of $3.00/gallon. So if oil drops and gas prices plunge below that level, then our overall cost drops, just not as much as the fuel price itself drops since we're still 50% hedged. In other words, the hedges dilute the drop or rise in fuel costs.
Also, remember that hedges aren't really a fixed price that we pay on fuel. A hedge just means that we're "hedging against" fuel costs by purchasing futures in other commodities, usually heating oil or something similar. In other words, we're diluting the increase or decrease in fuel costs. If oil prices increase to $150/bbl, then the adjusted fuel costs net including hedges would be higher than the quoted $3.00/gallon. Likewise, if fuel prices dropped, then net fuel costs would be less than the quoted $3.00/gallon. When they state that we are hedged at $3.00/gallon, that is based on current fuel prices factoring in the hedges. If fuel prices change, then that changes the net fuel cost also including the hedges.
