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The way you pay for gas can make a big difference
in how much you shell out at the pump.
While some drivers go online to find the lowest prices
in their neighborhood and others drive around burning precious gas
to save a penny or two per gallon, others are learning that "hedging,"
prepayment options and which credit card to pay with can save serious
money when they fill their tanks.
The first two options may or
may not be cost effective for you. You can easily find
out by using Bankrate's
interactive gas-savings calculator.
But failing that, and short of trading in your gas
guzzler for a puddle jumper that runs on corn oil,
here are three new ways that can make a big difference
in how much you shell out at the pump. |
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Fuel banks
One example of heads-up buying can be found at a small chain of
family-owned gas stations in St. Cloud, Minn.
As gas prices continue to erode drivers' budgets,
a six-station gasoline retail chain called First Fuel Banks has
gotten more than its share of attention.
For 17 years, First Fuel Banks has pegged its business
on allowing customers to buy their gasoline in bulk when prices
are down and then pump the fuel as they need it over time.
"We are giving our customers the advantage of
buying when prices are low to protect against when prices are high,"
says Danette Burlet of First Fuel Banks.
Unlike traditional prepaid gasoline cards, at First
Fuel Banks customers buy a set number of gallons, rather than just
deposit a set amount of money onto a card. Even as gas prices rise
and fall, the number of gallons a customer has purchased remains
the same until they pump them into their tank.
By allowing customers to buy gas by the hundred- or
even thousand-gallon increment, First Fuel Banks is essentially
allowing drivers to make financial hedges against future fuel prices,
much like how major airlines buy jet fuel futures on the commodities
market to protect against rising oil prices.
Some of First Fuel Banks' customers are still pumping
gas they bought years ago at less than $1 per gallon.
"We have prices ranging all over the place, with
some as low as 79 cents per gallon," Burlet says. "Mostly
we have people who locked in at $1.99 and up."
Drivers benefit, as long as the price for gas stays
above their locked-in price, and First Fuel Banks protects themselves
though a complex combination of financial deals, including buying
fuel futures on commodities markets.
And while motorists' interest has grown lately in
First Fuel Banks' prepay system, Burlet says the best time to lock
in a long-term contract isn't when prices are at their highest.
"Our really good customers watch the market and
get in when prices are the lowest," she says. "Our savvy
buyers are always looking ahead."
After all, Burlet says buying 1,000 gallons at $3
per gallon doesn't make sense unless you think prices are going
to continue to climb.
With drivers across the globe hurting from soaring
fuel prices, Burlet says First Fuel Banks has been peppered with
requests to expand beyond the St. Cloud market.
"We have been getting bombarded with requests
from around the nation and the world," she says. "But
we have been here for 17 years, and we are not looking to expand."
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