Lock in gas price?

[jeuchler]

I had heard about a "gasoline bank" in South DAkota where people filled up on gas based on the price at the the time they bought the gas months ago, and I wished there was something like that near my home.

Well, I just saw on a morning TV show this service called "My Gallons"


You buy gas based on the average price in your area and you get a card (like a debit card) which is accepted at any gas station that takes plastic.

When gas goes, say, 50 cents a gallon higher than the rate at which you bought the card, you use the card to buy the gas at the old rate.

There are penalties for overdraft (buying more gas than the amount the card wad "loaded" with), penalties for buying premium gas, a $1.95 fee, I think, for recharging the card.

The annual membership fee for the service is $29.95 with a money back guarantee.

Of course, it is a new company. I know many people were anxious about their Spyder deposit (what if BRP decided to fold production?) so I guess if you try it, it's best to try it with a small investment.

Of course #2, if gas prices go down, you can just buy your gas with cash, and reload your card at the new low rate to save for another more expensive time.

If I had enrolled last Wednesday when gas was $3.99 near me, my $30 gamble would have paid for itself over this holiday weekend!

Any thoughts? :chat:

 

[BRPjunkie]

I spent a large part of my career in the commodities business for a major midwest utility and futures contracts for oil, gas, natural gas, etc are common tools, but they are tools to be used by those with some experience. These operations pop up when prices are running higher and they make their bet that people will prepay for price security. As soon as you lock in the price, prudent operators immediately cover that risk and buy futures contracts covering the amount of gas they owe you. They take your fee as profit, benefit from the time value of having your money until your burn through the prepay. They usually disappear once prices start to fall. With some feeling that the peak summer driving season will create less demand than first forecast and that prices may be peaking, they need to move quickly while market fears allow the sales pitch to work. It can work for you if prices do keep going up and you are willing to bet enough to really make a difference. At $.20 per gallon average savings, you would need to make a $600 prepay ($4/gal, 150 gal) to get your $30 fee back. Depending on how long it takes you to use the 150 gallons, you are out that money for that time period.

While the card is accepted at any station, if the company goes under, you may find the card isn't accepted.

Sure, if price go up $.50, you get your money back a quicker, but again, unless you make a big bet, you will be working to recover your fee first and then you start to save.

If you don't mind prepaying and then tracking your savings, it might work, but things that seem too good to be true, usually are.