Having experienced wild gasoline price swings in the past Jane is concerned about gasoline prices in the near future. Jane drives a 2006 Toyota Camry and between her daily commute and the occasional weekend trip logs around 12,000 miles a year. Jane's Camry gets an average of 30 miles per gallon - resulting in 400 gallons per year of average fuel consumption. Jane lives in New York and does most of her driving within the state.
Upon visiting the GasLimit website and filling in the relevant information - Jane agrees to a price cap offer of $2.99 per gallon for the next 6 months. The cost for this protection is 12¢ per gallon and Jane pays the up front fee of $20.00
7.69 gallons per week x 26 weeks x 10¢ per gallon = $20.00. Jane's price protection details are as follows:
- Cap - $2.99 per Gallon
- Volume - 7.69 gallons per week
- Term length - 26 weeks
- Location Price - New York State region
Jane continues as she did before, attempting to find the lowest fuel prices available. Each week for the next 26 weeks, GasLimit monitors the fuel prices published by the Department of Energy for instances when it is published higher than the Cap.
One month later a Category 5 hurricane rips through the Gulf of Mexico bringing oil production to a screeching halt and driving the price of gasoline up on the third week of the month. However, Jane has nothing to be nervous about because she is capped at $2.99. That same week, the Department of Energy publishes the survey price at $3.25/gallon for the New York State region.
GasLimit automatically does what it promised it would do - calculating the credit to Jane by taking the $3.25 published price, less the $2.99 Cap and multiplying the 26¢ difference by 7.69 gallons. The result is a credit for $2 for that week. This credit automatically gets posted to Jane's account on the GasLimit website and an e-mail is sent to notify her. The same process occurs each week for the duration of the 6-month price cap. All credits are posted monthly to Jane's credit card.
RESULT - Jane has successfully controlled her budget and gasoline costs because her maximum cost per gallon will NOT exceed the $2.99 cap during the term of her agreement.
