The Bank of Gasoline
Fuel prices may be going down, but for some motorists fuel prices never went up. Over 8,000 motorists in the St. Cloud, MN area are paying an average of $.50 to $1.50 less per gallon than the current market price for their gas. How did they lock-in these low rates? They went to the Bank of Gasoline.
Since the mid-1980s, First Fuel Bank customers in the St. Cloud, MN area have been able prepay for their gasoline and lock in the price of their gas – no matter what gasoline prices do in the future. Customers can purchase as much gas as they like, whenever the price seems right. When gasoline prices rise above the price of their prepaid gas, First Fuel Banks customers can tap their gasoline accounts to fill-up their tanks. Conversely, when prices dip under the price of their prepaid gas, customers are free to purchase gas at another fueling station.
Although First Fuel Banks is only located in the St. Cloud, MN area, there are rumors of expansion to 11 other northeastern states.
Another company joining the prepaid gas bandwagon is the Fuel Bank. The Fuel Bank, based in Ft. Meyers, FL, is still laying the groundwork for a nation-wide prepaid gasoline network, but once established it promises customers the ability to pick-up their prepaid gas at any station in the nationwide network.
Although being able to lock in low gasoline prices sounds great, there are a few drawbacks.
The primary drawback to prepaying for your gasoline is that payment for these fixed prices is by credit card. If you don’t have the money to pay off the purchase in full when the bill comes, then the interest on the credit card will make the gas much more expensive due to interest charges. Depending on the price of your prepaid gas, you may not realize any actual savings.
Secondary drawbacks include the unavailability of stations at which to redeem your gasoline and the opportunity cost of prepaying for your gas. Depending on the price you lock-in versus the market price of gas, you might be better off letting your money sit in a high-yield savings account.
Nevertheless, if you live in an area near one of the Banks of Gasoline and have the savings to prepay for your gasoline, you’ll be laughing all the way to the bank...