Locking-in gas prices could end up costing you
David MacAnally/Eyewitness News
Indianapolis - When you need gas you need gas and you pay the price. And remember those prices that topped $4 last summer. But what if you could lock in your gas price now to avoid another $1.30 or so increase at the pump.?
One motorist told us it's like "trying to hedge your bet sort of. I've heard of this with bit commercial trucking companies." And now firms are popping by to help consumers save too. Companies like PetroFix.
The company's website shows how you can gain if prices gain. Say you buy a 3 month gas contract at a lock-in price, but the pump prices go up $1.50 a gallon. The company pays you that increase back.
PetroFix founder Edward Lee says "if gas prices go up you don't need to make the hard decision like 'when am I going to pay this bill or that bill.'"
So why not go out right now and lock-in? First, it's not 2008. Experts don't predict $4 gas. Also the dollar is strong keeping gas prices in check. Plus, to lock-in you must pay an upfront fee on every gallon.
Say you lock in at 100 gallons a month at $2.30 and prices jump to $2.80 a gallon. The company may owe you $150 but your upfront fees cut $90 out of your savings. And if prices keep falling you're still paying those fees.
"It's an interesting idea," says Butler University Professor Bill Rieber. But he cautions "unless gasoline prices go up by 25 or 30 cents a gallon which is what the motorists pays to participate in this program there is no desired benefit."