MG's problems stemmed from its nifty idea of offering customers long-term, fixed-rate contracts for oil and oil products, such as heating and fuel oil. Demand for such contracts had increased as oil prices fell after the Gulf war in 1991 and users wanted to lock in cheaper supplies. By the middle of last year MG had entered into contracts that obliged it to supply a total of up to 160m barrels over the next ten years.