Petrowski said he expects to roll out the program sometime [image-nocss] early next year in concert with a new loyalty program that would allow Gulf customers to get credit toward gasoline by making purchases at certain retailers.
The price-lock program would rely on cards that are similar to gift cards that Gulf currently uses; however, instead of buying gasoline on the cards in dollar denominations, customers could buy gasoline in gallon denominations at that day's price. They could then redeem the gasoline they purchased at the lower price later in the year as prices start to rise. The cards would have an expiration date, possibly a year after they are purchased, said the report.
It could be a bit of gamble because the customer would be stuck with more-expensive gasoline if fuel prices declined.
The company, meanwhile, plans to hedge its bets by making purchase contracts to buy the extra gasoline at the same time consumers buy the price-lock cards.
This isn't the first time Petrowski has floated the concept, the newspaper said. In May 2006, not long after he became CEO at Gulf, he said he was hoping to put a price-lock plan into place by the end of the year. But a few factors conspired to delay the rollout of the service. Petrowski said the technology that was available at the time would have been too expensive, and it would not have provided a frequent enough monitoring of purchases and redemptions for Gulf to keep pace with the volatile gasoline market.
He also said it didn't make sense to launch the program when gasoline prices were at record highs. Consumers would certainly be fuming if they locked in prices at the $4-a-gallon level. But motorists could be more likely to lock in prices at their current levels now that they have witnessed how high gasoline prices can go.
Jeff Lenard, a spokesperson for the National Association of Convenience Stores (NACS), told the paper that this system could be an innovative way for Gulf to build brand loyalty--if it can be implemented without hitches such as the possibility of too many customers getting stuck with gasoline they bought on the wrong side of the fuel-price curve. Lenard said he expects others in the industry will be closely watching Gulf's launch, which he added could reinvent the dynamic of how stations persuade customers to buy their fuel.
The price-lock system and loyalty program represent elements of a much broader expansion strategy, according to the report. Petrowski has been busy since he was hired by the Haseotes family--the owners of Newton, Mass.-based Gulf Oil and Canton, Mass.-based Cumberland Farms--with finding ways to convince potential franchisees to join the Gulf system.
He has had considerable success so far, with the Gulf network growing to about 2,200 stations now from 1,900 in early 2006 in the Northeast, the Mid-Atlantic states and Ohio.
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