Builders, Landscapers Use Pricelock to Hedge Fuel Like Southwest

The last time U.S. gasoline prices approached $4 a gallon, in May 2008, Chrysler offered new car buyers a payment card that would let them purchase gas at $2.99 a gallon for three years. The promotion didn’t halt Chrysler’s sales slide, down about a third from the year before. Most buyers chose other incentives, such as cash rebates, over the gas card. Customers who did take the discount saw market prices drop below their guaranteed price after the financial crisis. Refuel America, as the campaign was called, may have done more for Pricelock, the Redwood City (Calif.) fuel hedging company that engineered it, than for car buyers or for Chrysler, which filed for bankruptcy the next year.

Today Pricelock is trying to parlay its promotions with automakers into a broader business selling price protection to small and midsize companies that don’t buy enough fuel on their own to hedge in the futures markets. Founded in 2007, the 40-employee company has 24,500 fuel-card customers from the promotion with Chrysler and a similar one with Hyundai the following year. An additional 500 small businesses, such as building contractors, landscapers, and tow operators, pay Pricelock directly to control their fuel costs.