Lock in fuel prices

OliverGuy · Dec 27, 2008

I worked it out with our fuel supplier for our business and farm that I can pay them up front for a set amount of fuel to lock it in a certain price that day. They will hold it for me and deliver it whenever I want, but it must be within 6 months. I can always buy at todays price if it was cheaper and save mine for later in case it goes up. Sure seems interesting to do a little at least. They said they will go up to 8500 gallons. $4.20 fuel really put the hurt on my $$$ this year. I was spending $3000 a week in July, that wasn't very fun. It's $1.38 here today.

Ken McCubbin · Dec 27, 2008

You'll need to be very sure that the supplier is solid financially. If they go into bankruptcy. you'll likely be considered an "unsecured creditor". Happened with a propane company near here.

Not a lawyer, but a CPA.

Price is great, I filled my farm tank with dyed diesel for $1.749 yesterday

kyhayman · Dec 27, 2008

I've done that every year but last year. Would have then if my distributor would have offered it.

Anonymous-0 · Dec 27, 2008

Same thing here some years ago- guy bought corn and beans, sold fuel, did custom drying, storage, etc. Took 65 neighbors for a million one on his bankruptcy, 14 years ago- he has not worked a day since. I used to store corn there, had fewer acres that year, empty bins at home- they seemed pretty cheap at the time. Worst thing was when a neighbor a mile away, first year he combined, had no storage...had livestock to feed...could not take corn out- it was a bankruptcy asset, had to pay drying and storage...then buy corn to feed his livestock. Guy had a third grade education, honest as the day is long, could not understand the whole process. He got screwed big time!.

dwrk · Dec 28, 2008

I'd look around at other suppliers and see if you can find something better. I just locked mine in for 6 months, maximum price contract, if the price goes up I'm covered, if the price goes down I pay the lower price (do have to pay a 5% premium on the lower price). Only had to pay 3% now, I can afford to lose that if they go under.

Lock in fuel prices

OliverGuy

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Ken McCubbin

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kyhayman

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Anonymous-0

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dwrk

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