[emersonbiggins]

I saw a clip over this on the Today show this morning. Apparently some consumers in St. Cloud, MN have prepaid gas in a "bank" of sorts that locks in prices, much like is done on the commodities market. The results? People are filling up for ridiculously low prices like .99/gal or 1.99/gal. Anybody heard of this?

Interesting...

$this->bbcode_second_pass_quote('', 'W')ouldn’t it be great if you could have predicted the ridiculous prices that gasoline would hit, and bought a bunch of it before prices went through the roof?

Actually, many people did just that and, no, they didn’t have big underground storage tanks in their back yards. These people joined a Gas Bank. “Eh, what’s that?” you ask. Gas Bank, Gas Tank, what’s the difference? You don’t deposit gas into a gas bank, you deposit money. Here’s how it all works….

Joining a Gas Bank is a lot liking trading on the commodities market. When you join, you pre-purchase a supply of gas at the then current price. You receive a stored-value card, which is somewhat like a debit card, that you use to turn the gas pumps on at the bank’s filling station.

Regardless of which way the price of gas goes, and it’s been only going up lately, you’re getting it for the prearranged price.

Here’s an example:

Let’s say that you bought 100 gallons of gas when the price was $1.999. You gave the gas bank $199.99, and they reserved 100 gallons of gas for you at the $1.999 price. Every time you go to the bank’s filling station, you simply insert your card into the pump’s card reader and put gas into your tank. The gas bank deducts $1.999 for your account for each gallon. If the actual price of gas today is $3.009, you’re getting it at the locked-in price of $1.999. Once you have used 100 gallons of gas, the amount that you originally purchased, you can purchase more gas “credits” and whatever price gas is selling for on the day that you make your new deposit.

Now, before you run out the door screaming “Halleluiah”, you should know that there aren’t too many Gas Banks around. In fact, the only one that has any real visibility is located in Minnesota.

First Fuel Banks of St. Cloud, MN has over 8,000 members who are glad that they were smart enough to catch on to a good thing. Many of the members are fleet owners who operate several vehicles for their business. Although Mom and Pop drivers are saving a bundle as well, these commercial drivers are getting dizzy over how great the savings are... (more at link)

[EnergyHog]

$this->bbcode_second_pass_quote('emersonbiggins', 'I') saw a clip over this on the Today show this morning. Apparently some consumers in St. Cloud, MN have prepaid gas in a "bank" of sorts that locks in prices, much like is done on the commodities market. The results? People are filling up for ridiculously low prices like .99/gal or 1.99/gal. Anybody heard of this?

Interesting...
(more at link)

[aahala]

I saw this mentioned on TV the last day or two and it's an
interesting idea. It's a zero sum game except that the "bank"
has collected your money and there is probably no assurance,
other than ordinary business laws, the business will be able
to meet future obligations.

I am willing to bet if the price jumps sharply from this point, those
who have already locked in will be SOL, unless the scheme attracts
new members at the higher price. Whenever there might be a
sharp downward trend in gas prices, the existing members will
consider themselves suckers.

[emersonbiggins]

$this->bbcode_second_pass_quote('EnergyHog', 'T')his can't last long, why would anyone be short selling commodities, especially gas right now? Does the gas bank think that oil prices will come crashing down and consumers will be forced to pay $2/gal when gas is only $1.50? Why wouldn't the consumer just go to a different gas station? This whole thing makes no sense at all, it's like a gas charity, who's footing the bill?

[wildilocks]

Sounds like a fixed vs variable interest rate to me... okay slightly different but you can ask the same kinds of questions about who foots the bill there...