A Twist On Pre-Pay Gas
HUTCHINSON, Minn. -- With energy experts predicting that gasoline will again reach $3 a gallon this summer, Hutchinson Cooperative said it has found a way to help its customers hedge their fuel investment by offering a prepaid contract with a set price for a defined gasoline "allocation," the Hutchinson Leader reported.
Even non-co-op members can lock in a price now for allocations of at least 100 gallons of fuel, which must be used by Sept. 4. The price they pay is subject to a daily price that has been running several cents below the advertised pump price.
For example, contract price on Thursday was $2.58, while the pump price was $2.64. At that price, a minimum contract would cost $258 up front. Customers paying for their contract with a credit card must pay a processing charge of about a nickel per gallon.
"We have a specific number of gallons we can use," station manager Dean Brehmer told the newspaper. "We know what we have to sell, so we can't over subscribe."
Everyone buying a contract is issued a yellow plastic card that is swiped at the pump as would a credit card. The only difference is that a personal identification number must also be entered at the pump. A receipt shows the amount of gallons pumped and the amount remaining on the contract, according to the Hutchinson Leader.
The card is only available at Hutchinson Cooperative's Cenex cash station, not other Cenex outlets. The program also is only set up for to sell regular, 87-octane with 10-percent ethanol, not premium gas, E-85 or diesel.
"We hope in time to be able to offer a year-round card," Brehmer said.
Even non-co-op members can lock in a price now for allocations of at least 100 gallons of fuel, which must be used by Sept. 4. The price they pay is subject to a daily price that has been running several cents below the advertised pump price.
For example, contract price on Thursday was $2.58, while the pump price was $2.64. At that price, a minimum contract would cost $258 up front. Customers paying for their contract with a credit card must pay a processing charge of about a nickel per gallon.
"We have a specific number of gallons we can use," station manager Dean Brehmer told the newspaper. "We know what we have to sell, so we can't over subscribe."
Everyone buying a contract is issued a yellow plastic card that is swiped at the pump as would a credit card. The only difference is that a personal identification number must also be entered at the pump. A receipt shows the amount of gallons pumped and the amount remaining on the contract, according to the Hutchinson Leader.
The card is only available at Hutchinson Cooperative's Cenex cash station, not other Cenex outlets. The program also is only set up for to sell regular, 87-octane with 10-percent ethanol, not premium gas, E-85 or diesel.
"We hope in time to be able to offer a year-round card," Brehmer said.