Buying gasoline has always struck me as a great example of irrational behaviour masquerading as bargain hunting. People drive around until they have nothing but fumes left in search of cheap gasoline. People put $5 in and wait for the price to drop. When prices are high, a common brag is how cheap someone was able to buy some gas. People are crazy for a few cents off the price of gas.

And for what? An average-sized fuel tank is around 60 litres. Let’s say that I fill my tank when it’s almost empty. I add 50 litres at each fill. If I drive around, peering up at the gas signs until I find a station selling gas for $1.10/L then I pay $55 for my tank of gas. The following week, I drive around peering up at the gas signs and Bingo! find a station selling gas for $1.00/L. I pay $50 for my tank of gas. I laugh and ask people to guess how much I paid for my gas. Hoo-hah! I beat the system. I saved $5. Not such a big deal.

A few neighbourhoods away, someone else has just paid $1.05/L of gas. In another neighbourhood, someone paid $1.15/L. The price goes up and down, sometimes you pay a little more, sometimes you pay a little less. But you have to drive so you have to buy gas. The game of finding lower-priced gas is just a diversion from the pain of having to buy it in the first place. Maybe we kid ourselves that we make out ahead of the game. Maybe we do make out ahead by playing the game. I don’t think that matters, I haven’t seen a lot of gas companies go out of business.

At the same time all the gas companies are trying to find ways to keep customers loyal. They offer a commodity product and try to differentiate it with fancy tech-sounding additives. They have a schizophrenia. They want customers to pay at the pump for convenience, yet they also want customers to come into the store to stock up on chips and pop. But it’s a gas station. People pull in for gas or to use the bathroom. That’s about it. There doesn’t seem to be a lot of opportunity for building the business based on the site.

Now I have an idea for how gas stations can make their customers loyal: selling gas futures. What are gas futures? They’re essentially price speculation in the present on the future price of gas. It’s what commodity traders do all the time. Buy at one price and exercise at another. Here’s how it would work.

I’d partner with a major gas company to roll out a new brand. Let’s call it PriceMakers. Customers sign up with PriceMakers and get a PriceMakers Petro card. They use that just like a gas debit card, except that the card trades in gas instead of debt. When the price is low customers can buy lots of litres worth of gas and add them to their PriceMakers Petro card. When the price is high they can cash in those stockpiled PriceMakers litres at the price they originally paid for them. It’s simple hedging. Every month the PriceMakers members can see on their statement how much they saved on their gas bill by using their PriceMakers Petro card.

So what’s in it for the major gas company? A few things:

• Cash up front for future goods
• A loyal customer locked in to your product
• A trackable customer and their behaviours
• A customer you can market other products to
• Residual, purchased inventory that remains unused

Once the PriceMakers Petro card takes off, you can extend the PriceMakers idea to other commodity purchases with price fluctuations, such as air miles, long distance minutes and electricity. Purchases can also be extended to where there is price discrimination based on geography, such as in airports, where a cup of coffee or a sandwich costs double the same thing on the street.

Now, where the idea gets really crazy is when you open up the PriceMakers website and start to let people trade their credits to each other. Then you tap into a network effect and the growth of the program can be exponential. Geographic barriers are destroyed and people can trade gas from low-priced locations to high-priced locations. PriceMakers takes a small piece of these customer-to-customer transactions. Maybe there’s a membership, or maybe not.

So what do you think? Would you sign up? Would you tell someone about it? Would you use it?

If you have any ideas to contribute or questions, please add to the comments.