HOUSTON -- Using the hedging strategies, LoveMyGasPrice.com, a service that launched last week allowing consumers to essentially purchase insurance against significantly higher prices, lets drivers put a cap on their monthly gas expenses, reported CNN Money. When prices rise above the capped price, customers get cash back.
This is a way to "take control and manage your fuel exposure," G.P. Manalac, who founded the company after creating a similar one in the electricity market, told CNNMoney. "This addresses a need that is not being met by the marketplace."
Customers purchase a gasoline insurance plan from LoveMyGasPrice.com for $3.99 a month. Currently, the plan caps gas prices at $2.75 a gallon, which is well above the current national average of $2.39.
If gas prices--as measured by a government index of average retail prices--climb above $2.75, LoveMyGasPrice.com promises to refund customers the difference through PayPal. For example, if the gas price index rises to $3.75 a gallon for one month, drivers would receive a $20 refund for the month. That's the difference between their actual cost of $75 (20 gallons of gas at $3.75 each) and their capped cost of $55.
Drivers can only purchase a cap on the price of exactly 20 gallons of gas per month, said the report. That covers about two fillups for a typical vehicle. If they drive more than that, they can buy multiple plans for $3.99 each.
Click here to view the full CNN Money report.
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