Service Offers Prepaid Gas Cards At Current Fuel Prices
Posted on: Tuesday, 1 July 2008, 11:38 CDT
The rising price of gasoline is fueling the growth of a new service that allows U.S. drivers to purchase prepaid gas cards.
These recently introduced cards let users to pay the current price for a tank of gas to be used in the future. Steven Verona, founder and owner of Miami-based company MyGallons.com 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.
"The price of gasoline was changing all the time. It seemed unpredictable,", said on Monday.
"It seemed there had to be a way to fix the price," he said.
The marketability of the prepaid fuel cards works on the premise that the price of gasoline will continue to rise. About 2,000 people from different regions of the U.S. have created accounts with MyGallons.com, Verona said.
On Monday, the average retail price for U.S. gasoline hit a new record of $4.10 a gallon, rising 1.6 cents over the last week and up $1.14 from a year ago, the U.S. government said.
Verona said that most new customers warm up to the service 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.
Drivers purchase gasoline cards based on their zip code. MyGallons.com determines what that price is based using established providers of oil prices.
The cards can be swiped at the pump just like a credit or debit card. The card is accepted at over 95 percent of U.S. gas stations, according to the Web site.
“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.
If members are dissatisfied with the service, they can drop out of the program and receive a lesser of the current price or what they paid as a refund, Verona said.
"There is that risk that the price could fall significantly," said Verona.
"But I think that most people would agree that risk is pretty minimal. Overtime, it is going to go up even if there is no change in the supply/demand relationship because inflation alone would push the price up."
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Source: redOrbit Staff & Wire Reports
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User Comments (1)
| 1. |
Posted by Ironman on 07/01/2008, 13:32 Here are the problems I see with mygallons.com site. They state: 2000 members Soft Launch in January Problems: Registered Domain in March Registered company in April Got SSL Certificate 2 weeks ago (Not possible to run credit cards without it) Have testimonials on their site (Not possible since no site, no members and it takes 1-6 weeks to get card) Site went live last week Conclusion: Not too good. They are not being honest and truthful. Make your own conclusion |
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