The high price of gasoline has some U.S. drivers looking to the future.
A recently introduced service called MyGallons.com allows drivers to fill up their tanks sometime in the future but at current prices, using a debit-like card which banks gallons rather than dollars.
“The price of gasoline was changing all the time. It seemed unpredictable,” Steven Verona, founder and owner of the Miami-based company, said on Monday.
“It seemed there had to be a way to fix the price,” he said.
Working on the assumption that the price of gasoline will continue to rise, Verona started about two and a half years ago to put together the company which gives the driver some measure of control of what he pays for gasoline.
Since a soft launch in January, about 2,000 people representing a cross-section of regions across the U.S. have signed up with MyGallons.com to be able to help them find ways to cope with the rapidly rising price of gasoline, Verona said.
Verona said that new customers generally begin by purchasing 25 to 50 gallons of gasoline.
“Once they are comfortable with how MyGallons work, they are buying 100 to 200 gallons at a time,” Verona said.
Using regular unleaded gasoline as the benchmark, drivers pre-buy gasoline based on their zip code. MyGallons.com determines what that price is based using established providers of oil prices.
“We don’t sell futures. It’s prepurchased gas,” said Verona, who said MyGallons.com uses a sophisticated hedging strategy to protect and meet obligations to members.
The risk to the consumer is if price of gasoline in the future becomes cheaper rather than more expensive. But if members are dissatisfied, they can drop out of the program and receive a lesser of the current price or what they paid as a refund.
“There is that risk that the price could fall significantly,” said Verona.
Photo by MyGallons.
Service Lets Drivers Lock In Gas Prices
July 1, 2008 by Rich | 3 Comments
In Automobile, Energy Costs, Startup
cassy on July 1st, 2008 at 11:50 pm
This service provider is quiet good and more advantageous to private own vehicles because they can avail themselves personally and can secure a card of their own. In the case of company own vehicles, drivers can hardly avail the service because they still have to get a clearance from their company to avail this service card.
Sonu on July 2nd, 2008 at 1:14 am
hi
I am from India and rise in crude oil prices have hit the developing countries a lot like ours and it has become very difficult for coomon man to mange their finances. Hope this type of service could start in india as well.
Juan Camalich on July 2nd, 2008 at 4:21 am
Wow, this is really and interesting idea.
The rising gas prices have made everything more expensive and I don’t think they are going down again. There are many other alternatives to traditional gas but why haven’t they been worked out enough yet?
Just as an example:
The price of eggs have gone up by 45% since January 08… :(