TIME Mexico

Gas Blast at Mexico City Children’s Hospital Kills at Least 4

MEXICO-HOSPITAL-EXPLOSION
Rescuers work amid the wreckage caused by an explosion in a hospital in Cuajimalpa, Mexico City, on Jan. 29, 2015. David Deolarte—AFP/Getty Images

Mancera said the blast apparently was caused by a leak in the hose carrying gas from the truck to the hospital

(MEXICO CITY) — A powerful gas tank truck explosion shattered a maternity and children’s hospital in Mexico City on Thursday, killing at least three adults and one baby and injuring dozens.

Claudia Dominguez, spokeswoman for the city’s civil defense agency, confirmed the deaths and said she expected an updated toll soon.

She said she could not confirm the report by the local borough chief, Adrian Rubalcava, that seven had died

Rescuers continued digging through the rubble even as smoke rose from remaining fires.

Mayor Miguel Angel Mancera earlier told the Televisa network that at least 54 people were injured, 22 of them children. Most of the injuries were relatively minor, he said, many caused by flying glass.

Fausto Lugo, the city’s civil defense director, said 37 people were transported to other hospitals and he said other people were likely still buried in the rubble.

The explosion sent a column of smoke billowing over the area on the western edge of Mexico’s capital and television images showed much of the hospital collapsed, with firefighters trying to extinguish fires. Mancera said the heaviest damage was near the hospital’s loading dock.

Mancera said the blast apparently was caused by a leak in the hose carrying gas from the truck to the hospital, which is operated by the city.

“The truck must have had some failure, the hose and that’s what caused the explosion,” Mancera said. He said that fire continued burning because firefighters recommended that they allow the truck’s remaining gas to burn off. He said there was no risk of another explosion.

Ismael Garcia, 27, who lives a block from the hospital, said “there was a super explosion and everything caught on fire.”

Garcia ran toward the hospital where the truck had exploded and was told it had been connecting to the kitchen when the explosion occurred.

Garcia and others entered the hospital and made their way to the nursery. “Fortunately, we were able to get eight babies out,” he said.

Rubalcava said the injured were being taken to a nearby hospital, but the area had insufficient ambulances.

Rafael Gonzalez of the Red Cross said one 38-year-old woman was stable in their hospital in Polanco while a 27-year-old man who had initially been taken there was transferred again with burns over 90 percent of his body.

President Enrique Pena Nieto expressed his sadness and support for the victims through his official Twitter account.

According to a government website, the hospital was founded in 1993 and counted 35 beds. It is located in a densely populated lower middle class neighborhood next to a school.

MONEY Gas

Gas Prices Rise for the First Time in 4 Months

That incredible drop in the cost of filling up your car has taken a very small break.

MONEY Airlines

Airlines Drop Fuel Surcharges, but Flights Don’t Get Cheaper

A Boeing Co. 737 aircraft operated by Qantas Airways Ltd. flies past the air traffic control tower as it lands at Sydney Airport in Sydney, Australia
A Boeing Co. 737 aircraft operated by Qantas Airways Ltd. flies past the air traffic control tower as it lands at Sydney Airport in Sydney, Australia Brendon Thorne—Bloomberg via Getty Images

Two airlines recently removed those annoying fuel surcharges that have been tacked onto passenger tickets for years. So that means airfare is less expensive, right? Nope.

The idea of a fuel surcharge is pretty simple: When the cost of fuel is abnormally high, instead of simply raising prices, a special, supposedly temporary fee is passed along to customers. When fuel costs retreat back to “normal” levels, logic dictates that the surcharge would disappear.

It’s this kind of wholly logical thinking that has had airline travelers up in arms over the last several months, as the price of gasoline and rocket fuel has declined substantially, yet fuel surcharges remain and airfares are still extraordinarily high. Consumer advocacy groups Travelers United and FlyersRights.org recently sent letters to airline CEOs voicing their outrage and demanding that airfares be lowered “in light of the 50% reduction in jet fuel prices since June, 2014.”

“Common sense says prices should drop when the biggest cost factor in flying nosedives,” Charlie Leocha, chairman of Travelers United, said via press release. “This isn’t rocket science. Though economists can make lots of excuses, if there were more competition, consumers would be seeing lower costs to fly.”

At first glance, it appears as if some of this madness is coming to an end Down Under. As the Sydney Morning Herald put it, Virgin Australia recently announced it was removing “consumer-reviled references to fuel surcharge” from its tickets. This surcharge added as much as AUD$680 (US$540) to the cost of an international round trip. Qantas, which competes with Virgin Australia on many routes, including flights between the U.S. and Australia, followed suit by saying that it too would get rid of fuel surcharges on tickets.

To which travelers might reasonably respond: Hallelujah!

Not so fast. The removal of these hated, astronomically expensive fees is having little to no impact on the actual cost of airfare paid by travelers. For the most part, the airlines are simply incorporating fuel charges into base airfare prices, and the amount paid out of pocket by passengers will remain stubbornly high.

Virgin America said that coach passengers can expect to see a decrease of perhaps AUD$40 (a measly $32 in U.S. currency) on tickets between the U.S. and Australia. Mind you, the old surcharge hit passengers to the tune of AUD$680 (US$540). As for Qantas, its airfares will remain exactly the same even as fuel surcharges disappear.

In other words, the carriers are jacking up flight prices to compensate for the “removal” of fuel surcharges. They’re giving travelers a price break with one hand while taking more money away from customers with the other. The net result is that passengers are paying pretty much the same for the cost of transportation before the changes were announced. The only thing that’s changed is how the airlines break down the flight costs.

To airline passengers, who want their total out-of-pocket costs to drop, and who couldn’t care less about how the airlines categorize each component of a flight’s price, these “changes” mean that nothing at all has really changed.

MONEY Oil

Why Oil Prices May Not Recover Anytime Soon

A worker waits to connect a drill bit on Endeavor Energy Resources LP's Big Dog Drilling Rig 22 in the Permian basin outside of Midland, Texas, U.S., on Friday, Dec. 12, 2014.
Brittany Sowacke—Bloomberg via Getty Images

Things could get worse for the oil industry before they get better.

Oil prices have collapsed in stunning fashion in the past few months. The spot price of Brent crude reached $115 a barrel in June, and was above $100 a barrel as recently as September. Since then, it has plummeted to less than $50 a barrel.

Brent Crude Oil Spot Price Chart

There is a sharp split among energy experts about the future direction of oil prices. Saudi Prince Alwaleed bin Talal recently stated that oil prices could keep falling for quite a while and opined that $100 a barrel oil will never come back. Earlier this month, investment bank Goldman Sachs weighed in by slashing its short-term oil price target from $80 a barrel all the way to $42 a barrel.

But there are still plenty of optimists like billionaire T. Boone Pickens, who has vocally argued that oil will bounce back to $100 a barrel within 12 months-18 months. Pickens thinks that Saudi Arabia will eventually give in and cut production. However, this may be wishful thinking. Supply and demand fundamentals point to more lean times ahead for oil producers.

Oil supply is comfortably ahead of demand

The International Energy Agency assesses the state of the global oil market each month. Lately, it has been sounding the alarm about the continuing supply demand imbalance.

The IEA currently projects that supply will outstrip demand by more than 1 million barrels per day, or bpd, this quarter, and by nearly 1.5 million bpd in Q2 before falling in line with demand in the second half of the year, when oil demand is seasonally stronger.

That said, these projections are built on the assumption that OPEC production will total 30 million bpd: its official quota. However, OPEC production was 480,000 bpd above the quota in December. At that rate, the supply-and-demand gap could reach nearly 2 million bpd in Q2.

Theoretically, this gap between supply and demand could be closed either through reduced supply or increased demand. However, at the moment economic growth is slowing across much of the world. For oil demand to grow significantly, global GDP growth will have to speed up.

It would take several years for the process of lower energy prices helping economic growth and thereby stimulating higher oil demand to play out. Thus, supply cuts will be necessary if oil prices are to rebound in the next two years-three years.

Will OPEC cut production?

There are two potential ways that global oil production can be reduced. One possibility is that OPEC will cut production to prop up oil prices. The other possibility is that supply will fall into line with demand through market forces, with lower oil prices driving reductions in drilling activity in high-cost areas, leading to lower production.

OPEC is a wild card. A few individuals effectively control OPEC’s production activity, particularly because Saudi Arabia has historically borne the brunt of OPEC production cuts. Right now, the powers that be favor letting market forces work.

There’s always a chance that they will reconsider in the future. However, the strategic argument for Saudi Arabia maintaining its production level is fairly compelling. In fact, Saudi Arabia has already tried the opposite approach.

In the 1980s, as a surge in oil prices drove a similar uptick in non-OPEC drilling and a decline in oil consumption, Saudi Arabia tried to prop up oil prices. The results were disastrous. Saudi Arabia cut its production from more than 10 million bpd in 1980 to less than 2.5 million bpd by 1985 and still couldn’t keep prices up.

Other countries in OPEC could try to chip in with their own production cuts to take the burden off Saudi Arabia. However, the other members of OPEC have historically been unreliable when it comes to following production quotas. It’s unlikely that they would be more successful today.

The problem is that these countries face a “prisoner’s dilemma” situation. Collectively, it might be in their interest to cut production. But each individual country is better off cheating on the agreement in order to sell more oil at the prevailing price, no matter what the other countries do. With no good enforcement mechanisms, these agreements regularly break down.

Market forces: moving slowly

The other way that supply can be brought back into balance with demand is through market forces. Indeed, at least some shale oil production has a breakeven price of $70 a barrel-$80 a barrel or more.

This might make it seem that balance will be reasserted within a short time. However, there’s an important difference between accounting profit and cash earnings. Oil projects take time to execute, involving a significant amount of up-front capital spending. Only a portion of the total cost of a project is incurred at the time that a well is producing oil.

Capital spending that has already been incurred is a “sunk cost.” The cost of producing crude at a particular well might be $60 a barrel, but if the company spent half that money upfront, it might as well spend the other $30 a barrel to recover the oil if it can sell it for $45 a barrel-$50 a barrel.

Thus, investment in new projects drops off quickly when oil prices fall, but there is a significant lag before production starts to fall. Indeed, many drillers are desperate for cash flow and want to squeeze every ounce of oil out of their existing fields. Rail operator CSX recently confirmed that it expects crude-by-rail shipments from North Dakota to remain steady or even rise in 2015.

Indeed, during the week ending Jan. 9, U.S. oil production hit a new multi-decade high of 9.19 million bpd. By contrast, last June — when the price of crude was more than twice as high — U.S. oil production was less than 8.5 million bpd.

One final collapse?

In the long run — barring an unexpected intervention by OPEC — oil prices will stabilize around the marginal long-run cost of production (including the cost of capital spending). This level is almost certainly higher than the current price, but well below the $100 a barrel level that’s been common since 2011.

However, things could get worse for the oil industry before they get better. U.S. inventories of oil and refined products have been rising by about 10 million barrels a week recently. The global supply demand balance isn’t expected to improve until Q3, and it could worsen again in the first half of 2016 due to the typical seasonal drop in demand.

As a result, global oil storage capacity could become tight. Last month, the IEA found that U.S. petroleum storage capacity was only 60% full, but commercial crude oil inventory was at 75% of storage capacity.

This percentage could rise quickly when refiners begin to cut output in Q2 for the seasonal switch to summer gasoline blends. Traders have even begun booking supertankers as floating oil storage facilities, aiming to buy crude on the cheap today and sell it at a higher price this summer or next year.

If oil storage capacity becomes scarce later this year, oil prices will have to fall even further so that some existing oil fields become cash flow negative. That’s the only way to ensure an immediate drop in production (as opposed to a reduction in investment, which gradually impacts production).

Any such drop in oil prices will be a short-term phenomenon. At today’s prices, oil investment will not be sufficient to keep output up in 2016. Thus, T. Boone Pickens is probably right that oil prices will recover in the next 12 months-18 months, even if his prediction of $100 oil is too aggressive. But with oil storage capacity becoming scarcer by the day, it’s still too early to call a bottom for oil.

TIME Morning Must Reads

Morning Must Reads: January 24

Capitol
The early morning sun rises behind the US Capitol Building in Washington, DC. Mark Wilson—Getty Images

Fuel’s Paradise

A majority of Americans are paying less than $2 per gallon for gas for the first time since 2009, and the ever-cheapening fuel is helping put more money in consumers’ pockets and bolster the economy

NASA Finds ‘Super Earths’

NASA’s Kepler Mission has found many planets in the “Goldilocks zone,” where it isn’t too hot or cold for water to exist

McDonald’s CEO Asks for Time

McDonald’s CEO Don Thompson cited a litany of actions the company is taking to reverse steep declines in sales

Federal Judge Strikes Down Gay-Marriage Ban in Alabama

A U.S. district judge ruled Friday in favor of two Mobile women who sued to challenge Alabama’s refusal to recognize their marriage performed in California. The judge said a state statute and 2006 amendment to the Alabama Constitution violated the U.S. Constitution

Big Storm Headed for the East Coast

A nor’easter could wreak havoc all along the East Coast this weekend, with a mix of rain and snow that will likely cause airline and traffic delays along the I-81 and I-95 corridors. Up to a foot of snow could accumulate in some locations

Obama to Cut Short India Trip to Visit Saudi Arabia

The schedule change, announced shortly before Obama left for India, means the president will skip plans to see the Taj Mahal, and instead pay a call on an influential U.S. ally in the volatile Mideast. Saudi Arabia’s King Abdullah died Friday at age 90

An Asteroid Will Fly Close to Earth on Monday

It doesn’t sound like a close shave, but in astronomical terms, it is. An asteroid will fly within 745,000 miles of Earth on Monday, NASA said, the closest a space rock will fly to Earth until 2027

Chicago Cubs Hall of Famer Ernie Banks Dies at 83

Ernie Banks, the Hall of Fame slugger and two-time MVP who always maintained his boundless enthusiasm for baseball despite decades of playing on miserable teams, died Friday night. He was 83

Emma Watson Launches New Anti-Sexism Initiative

Harry Potter star and U.N. Women Global Goodwill Ambassador Emma Watson unveiled the the HeForShe IMPACT initiative, a one-year pilot project geared toward advancing women by working with governments, companies and universities

Ebola Vaccines Get Tested in Liberia

The long-awaited vaccine for Ebola is heading to clinical trials in Liberia. Two vaccines, with the National Institutes of Health’s (NIH) support, will start efficacy testing in Liberia in the beginning of February

SkyMall Files for Bankruptcy

The parent company of in-flight shopping catalog SkyMall has filed for Chapter 11 bankruptcy, citing an increased prevalence of mobile devices on planes as the primary reason for the company’s flagging sales

Apple Store Chief Gets the Big Bucks

How much does Apple care about its retail stores? Enough to pay more than $70 million to the woman heading them up, making her the highest-paid exec at the company. Angela Ahrendts earned $73.4 million in 2014, almost all of it in stock awards

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TIME Economy

See the State With the Cheapest Gas in the U.S.

Gas prices in Missouri plummeted to $1.58 in January

At first look, the collapse in oil prices over the past year, from $107 per barrel in June to below $50 a barrel today, seems like the proverbial free lunch for American consumers. The decline in prices is the equivalent of a $125 billion tax cut. And it’s effectively a progressive one, since the biggest beneficiaries will be working- and middle-class people who spend a disproportionate amount of their income on gas for their cars and heating fuel for their homes. American households with oil heat could save $767 each this winter. That cash can now be spent on a new car—or a washing machine, an electronic gadget, clothes or a few dinners out.

That should boost spending, and …

Read the full story, which appears in the Feb. 2, 2015 issue of TIME, here.

MONEY Autos

So About That Goal of 1 Million Electric Cars by 2015 …

A Tesla Motors Inc. Model S connected to a charger at the Short Hills Mall in Short Hills, New Jersey
A Tesla Motors Inc. Model S connected to a charger at the Short Hills Mall in Short Hills, New Jersey Emile Wamsteker—Bloomberg via Getty Images

In the 2011 State of the Union, President Obama called for 1 million electric plug-in cars to be on American roads by 2015. Well, it's 2015, and we're less than one-third of the way there. What happened?

In Tuesday night’s State of the Union Address, President Obama discussed how “America is number one in oil and gas,” and said that “thanks to lower gas prices and higher fuel standards, the typical family this year should save $750 at the pump.” There was no mention, however, of an automobile-related goal set in the SOTU four years ago, when the president pushed for 1 million electric plug-in vehicles to be purchased by consumers by 2015.

The likely reason for leaving electric cars out of the president’s recent speech is obvious: America is nowhere near reaching that 1 million EV goal. As the Detroit News noted earlier this week, “sales [of electric cars] have been far slower than expected — about 280,000, including 120,000 in 2014,” and that “even with dramatic increases it could take at least four more years to hit the mark.”

It wasn’t supposed to turn out this way. A 2011 Department of Energy report declared the 1 million EV goal “ambitious” and yet “achievable” by 2015, with the help of some conditions:

While it appears that the goal is within reach in terms of production capacity, initial costs and lack of familiarity with the technology could be barriers. For that reason, President Obama has proposed steps to accelerate America’s leadership in electric vehicle deployment, including improvements to existing consumer tax credits, programs to help cities prepare for growing demand for electric vehicles and strong support for research and development.

The report estimated that starting in 2012, GM would be selling 120,000 Chevy Volts annually, and that by 2014, Nissan would be churning out 100,000 plug-in Leafs per year. Even though 2014 was seen as a decent year for the EV market, and quite a good year for the category-leading Leaf, only about 30,000 Leafs sold last year. That was an all-time high, but far short of the goal set a few years beforehand. Meanwhile, consumers bought only 1,490 gas-electric Chevy Volts in December 2014, and fewer than 20,000 in the year as a whole. The fact that Chevy was expected to debut a new Volt in early 2015 is only part of why sales have been anemic.

It’s no sudden surprise that America is coming up way short on the 2015 EV goal. By 2013, Obama and the Energy Department admitted that it wouldn’t happen, even as federal policies promoting EV adoption will run $7.9 billion through 2019, including but not limited to a $7,500 tax credit with each EV purchase.

Among the reasons often cited for lower-than-wished-for EV sales are their limited driving range in between charges and their still high initial costs even after tax credits, as well as vastly improved fuel efficiency in gas-powered cars (even SUVs) and, in recent months, exceptionally cheap gas prices. “The need to transition to electric cars is urgent,” Tesla CEO and EV visionary Elon Musk said in Detroit last week. Based on several years’ worth of sales data, however, consumers apparently aren’t feeling much sense of urgency on the matter.

The 2011 Energy Department report noted that “automobile consumers tend to be risk-averse, preferring well-proven technology,” and that “the performance and cost effectiveness of the early EVs in the market will be a major but unknowable factor in how many EVs are on the road by 2015.” Here we are in 2015, and it sure looks like, by and large, consumers haven’t bought into the cost-effectiveness pitch for EVs, either because they deem the vehicles too pricey, too impractical, or both.

This doesn’t mean that EVs won’t enjoy mainstream success down the road. Gas prices surely aren’t going to stay cheap forever. One former oil industry executive told USA Today that he sees $5 per gallon on the horizon in the near future. At the same time, EVs will keep getting cheaper and more practical for consumers, with the recent introduction of the $30K, 200-mile Chevy Bolt plug-in as a potential game changer in a couple of years. All of which changes the math on the potential purchase of an EV, and makes the prospect of owning one much more cost-effective.

So we’ll get to that 1 million EV goal at some point. It’s just a matter of when—and how much we’ll have to spend to get there.

MONEY Autos

Auto Show’s Most Talked-About Car Is One You Can’t Buy This Year

The Chevrolet Bolt EV concept vehicle
The Chevrolet Bolt EV concept vehicle makes its global debut Monday, January 12, 2015 at the Auto Show in Detroit, Michigan. Jose Juarez—Chevrolet

Probably the most-discussed vehicle at the Detroit Auto Show was the Chevy Bolt, an electric car that can be driven 200 miles on a charge and costs only $30,000. You can't buy one this year, though, or next year either.

The Auto Show kicked off this week with GM’s unveiling of the Chevrolet Bolt, which, despite its “concept car” label is expected to be a reality in the near future—on the market in 2017, most likely. The concept vehicle captured the imagination of many by (theoretically) solving the two big issues that have thus far stopped electric plug-in vehicles from being embraced by the mass market. Today’s plug-ins are either too impractical (driving ranges under 100 miles before the battery needs a charge) or too expensive ($70,000 and up for a Tesla Model S) for the typical household. With a 200-mile range and an asking price anticipated to be around $30,000 (after credits and incentives are factored in), the Bolt has been heralded as a potential mass-market breakthrough.

Here’s what people have been saying about the Bolt:

It’s a game-changer, likely to be a mainstream hit.
“The Bolt EV concept is a game-changing electric vehicle designed for attainability, not exclusivity,” GM CEO Mary Barra said during the model’s unveiling in Detroit this week. “For most people, [the Bolt] can be their everyday drive.”

Some less-biased, non-GM folk seemed to agree that the combination of affordability and expanded driving range before requiring a charge will make the Bolt appealing to the mainstream. “Getting to the 200-mile mark is when you start to see potentially a much wider base of mainstream consumers who aren’t just making short commutes, and don’t just want to be ‘green,'” Kelley Blue Book senior analyst Akshay Anand summed up to the Los Angeles Times. “You are looking at annual sales of 100,000 vehicles,” chimed in John Krafcik of TrueCar.com, a big leap up from the still-niche Nissan Leaf, which at 30,000 units sold in 2014 was America’s best-selling plug-in EV.

Others are more skeptical.
“You have to wonder what the market will be for super-efficient vehicles at a time when oil is around $50 a barrel,” auto industry consultant Jeremy Anwyl said to the Los Angeles Times. The assessment of Wall Street Journal columnist Holman W. Jenkins, Jr., was much rougher, writing that the Bolt is largely the product of automakers being forced by the government to meet fuel-economy mandates down the road, with the result being “cars the public doesn’t want and that can only be sold at a giant loss.”

It’s not very cool looking.
The $70K Tesla Model S became a favorite among auto enthusiasts not because it saves on gas—not only anyway—but because it’s a hot, stylish, high-performance car that’s incredibly fun to drive and show off. The cheaper and more practical Bolt, on the other hand, is expected to drive more like a golf cart, with looks to match. The Associated Press described the bubble-shaped Bolt as looking “like a cross between a Volkswagen Golf and BMW’s electric i3.” “There wasn’t much about it that was fanciful-looking in terms of features and styling,” a Motley Fool post noted.

Tesla doesn’t sound remotely concerned.
Despite headlines presenting the idea that the Bolt would be a “rival” and perhaps “upstage” Elon Musk’s hi-tech plug-in auto brand or even prove to be a “Tesla killer,” Tesla isn’t exactly shaking in its boots. In a released statement that’s the equivalent of a pat on the head of a cute, unthreatening puppy, Musk’s company announced, “Tesla is always supportive of other manufacturers who bring compelling electric vehicles to market … We applaud Chevrolet for introducing the Bolt and are excited to learn more about the product.”

Later, in an Auto Show press conference, Musk said flatly, “I don’t see it as a competitive threat.” The “it” in question is the Bolt, of course. “I’m pleased to see [GM CEO Mary Barra] and GM do it. It seems that [GM] will do something significant with the Bolt, and that’s great.”

Oh, and the name is terrible and might be changed.
Green Car Reports proclaimed that Bolt is a “really terrible name” for Chevy’s new EV. As evidence of the name’s terribleness, the site pointed to quips on social media noting that the name brings to mind the phrase “bucket of bolts,” the unloved old Dodge Colt, and even the 2008 cartoon movie dog named Bolt (voiced by John Travolta). The real problem, however, is that because the letters B and V sound alike when spoken aloud, “Bolt” will be easily confused with its gas-hybrid sister Chevy. “To say that there will be a great deal of confusion at dealerships between the Chevy Bolt and the Chevy Volt would be a gross understatement,” Green Car Reports explained.

The Detroit News reported that while GM likes the idea of linking the electrified Bolt and Volt with names that are alike, the automaker is not committed to keeping it. “The name by itself is very good, but when you put it with Volt you know — is it too confusing for someone? — we’ll find out,” said GM product chief Mark Reuss. “It’s a concept name. End of story.”

MONEY Gas

Can Consumers Lock In Low Gas Prices for the Future?

locked up gas can
Jeffrey Coolidge—Getty Images

Locking in gas prices is possible, but comes with a healthy amount of risk.

Another day, another drop in oil prices. Reuters reports Brent crude hit a near six-year low on Tuesday, and prices at the pump have been been falling at a cent-per-day pace.

Cheaper fuel is obviously amazing news for drivers. AAA estimates low gas prices will save the average American family $550 on gasoline costs this year. That’s nice and all, but what about next year? Is it possible to somehow lock in current gas prices for the long term? At MONEY, we set out to answer that very question.

The obvious move when a commodity suddenly tumbles in price is to stock up now. But with gasoline, that’s not really an option. Sure, it’s possible—Slate has a 2008 guide to doing so (they thought $3.87 a gallon was cheap!)—but experts don’t exactly see hoarding fuel as a smart way to save some coin.

“Storing gasoline is not recommended, that’s for certain,” said Michael Green, a spokesman for AAA. “Gasoline only lasts a few months before it starts breaking down. That’s not really going to work for you, and it could also have negative safety consequences.” Plus, depending on your local fire code, it’s probably illegal to store more than few gallons anyway.

Another option, for those not looking to explode, is to use a service that offers the ability to buy gas at current prices and then “cash in” those gallons when prices rise.

That’s the major selling point of First Fuel Bank, a family-run business operating out of St. Cloud, Minn. Customers with a prepaid “locked account”—lifetime membership costs $1—can buy gallons at a fixed price and then receive that gas any time in the future when they stop by a First Fuel Bank station.

Right now, the bank is selling a price-locked gallon of unleaded for $2.959, about a dollar above Minnesota’s market rate, but well below prices just a few months back.

Despite the premium, First Fuel Bank President Jim Feneis says consumers are rushing to stock up for the future. “We’re seeing a whole new resurgence of people locking the price,” he told MONEY.

Feneis’s company has only five locations, all in and around St. Cloud, but MyGallons.com offers the rest of country a similar service by letting consumers purchase a set amount of gallons over the internet at current prices. When prices go up, members can cash in their gallons, and have their earnings loaded onto a debit card or deposited into their bank account..

Like First Fuel Bank, MyGallons charges a premium for the promise of a fixed price. When membership and fees are taken into account, $2 gas turns into $2.39 per gallon—assuming a 150-gallon purchase.

Hedging against future costs certainly sounds attractive, but experts warn that products like MyGallons are essentially a more consumer-friendly way to trade futures and carry the same risks as any investment.

“It’s a gamble,” said Allison Mac, a petroleum analyst with GasBuddy.com, a site that tracks fuel prices in the U.S. and Canada. Mac warns the current price drop is primarily the result of decisions by OPEC, a cartel of petroleum exporting countries, and it’s difficult to predict the group’s future actions. Should prices stay low, a bet on higher prices in the future could turn out to be a costly mistake. “You just have to do the math in your head whether it’s worth it,” she said.

Green is equally skeptical. “We’ve seen gas prices drop about 40% since June,” he said. “If you had bought gas in June because you were concerned about what’s happening, you would have lost money.”

And as AAA’s Green points out, trying to beat the market on commodities can be just as foolish as trying to pick stocks. “Even people who trade on this every day can lose money,” he observed. “The average person is probably not going to be an expert on this.”

MONEY Gas

5 Kinds of Businesses Still Tacking On a Fuel Surcharge

UPS truck
Justin Sullivan—Getty Images

Fuel prices are plummeting, but some businesses are still passing the cost of gas on to the customer.

Fuel prices are currently at a six-year low and falling fast. A barrel of crude is about $48, down from $100 in September of last year. And on Monday, AAA reported the national average for a gallon of regular was $2.13, down 7¢ in just one week.

This price crash means big savings for the average American at the pump, but it also means businesses that use lots of fuel—like airlines, transportation services, and delivery companies—are seeing a windfall as well. Unfortunately, many have chosen not to pass those savings on to the consumers. How are they getting away with this?

Sometimes there’s a semblance of justification for fuel surcharges even at a time when fuel prices plummet. Allison Mac of the gas-tracking site GasBuddy told us via email that businesses are slow to change or drop fuel surcharges “because they need to be sure” that prices are going to stay low. Also, while drivers know how dramatically gas prices have decreased in recent months, they’re less aware that diesel fuel—used by delivery trucks, among others—has remained comparatively high. “The past couple of months we have seen gasoline dropping quickly and dramatically, but that is not the case for diesel,” Mac said.

Nonetheless, in many cases nowadays, it sure looks like the fuel surcharge is a blatant money grab. Here are some of the business categories where such surcharges are still in effect.

Taxis

During the days of high gas prices in 2008 and 2011, many municipalities instituted a fuel surcharge for taxis to give cabbies some relief. It made sense at the time, but some cities have maintained the extra fee, and consumers aren’t too pleased about it.

Philadelphia is one city where a fuel surcharge is still in effect. The fee changes each month based on gas prices; it was 75¢ per trip in December. “What it was meant to establish was, basically, a permanent component in the medallion taxicab tariff which reflects fuel prices, no matter how low or how high they are,” said Jim Ney, director of Philadelphia Parking Authority’s Taxi and Limo division in an interview with CBS Philly. That hasn’t mollified riders very much. “We’ve gotten a few inquiries about it, that’s for sure,” Ney acknowledged.

In Chicago, cab rides carry an even larger $1 fuel surcharge. Drivers were initially unhappy with the newly permanent charge because it was seen at the time as too low. However, cabbies are likely singing a different tune now that they can reap the benefits of low fuel costs and higher fares.

Airlines

Jet fuel prices have been slashed by at least one third over a recent 12-month span, yet with scant few exceptions airfares remain high, and airlines insist on tacking on fuel surcharges to many flights. Theoretically, such a fee—which can easily add $500 or more to the total cost of an international round trip—is instituted to help airlines cover their added expenses during periods when fuel is extraordinarily expensive. In practice, however, the surcharge is often simply a sneaky way for airlines to milk customers for more money without them really knowing what the fees are meant to cover.

As a recent Quartz article put it, fuel surcharges “don’t bear much relation to how much fuel actually costs,” and are instead just “arbitrary numbers that the industry adjusts to maximize their profits while staying competitive with other carriers.” In other words, airlines justify the tacking on of fuel surcharges because other airlines tack on fuel surcharges—and when they’re all on board with the scheme, it’s easy to get away with it because travelers don’t have anywhere else to turn.

Travel advocate Christopher Elliott has pointed out over the years that the airline industry originally said “it was adding a surcharge for the first checked bag to cover higher fuel costs, but when fuel prices dropped, it kept the fee.” Likewise, airlines are likely to keep on sticking passengers with fuel surcharges even as fuel prices drop. And the reason why they’re doing so is obvious: They make lots of money on surcharges—and they make even more when their costs are lower for what the surcharge is supposed to be covering (i.e., fuel).

Some relief could be in sight, however, starting with how one international carrier (Japan Airlines) decided it will cut its fuel surcharge as of February 1. Tim Winship of SmarterTravel.com and Frequent Flier applauded the way that Japan Airlines’ current fuel surcharge on flights between the U.S. and Japan ($259) will be scaled back to $173 each way, while pointing out that other airlines should do the “right thing” and decrease surcharges as well. Also, Winship wondered, “How low must fuel prices fall before the surcharges are eliminated altogether?”

Express Delivery Services

For the period stretching from January 5 to February 1, 2015, Federal Express is adding a 4.5% surcharge on express shipments and a 5.5% surcharge on ground deliveries. Why? For one thing, FedEx says it bases the surcharge on diesel fuel—most delivery trucks use diesel, after all—and diesel prices have dropped far more slowly than gasoline. What’s more, FedEx’s surcharges aren’t based on fuel prices from today, or even last week. “There is a two-month lag between the fuel price index and the fuel surcharge,” the company explains. “For example, the fuel surcharge for November 2012 is based on the September 2012 average spot price of fuel.”

Likewise, UPS tweaks its surcharge once a month, and its current surcharge rates are even higher than FedEx’s: 6.5% for ground shipments, and 7% for air and international packages.

Moving Companies

Again, because moving trucks generally run on diesel, and diesel fuel remains fairly expensive, many moving companies are still tacking fuel surcharges onto customer bills. Atlas Van Lines, for instance, has a surcharge of 12% in effect through January 14 for moving household goods. After that, the surcharge drops to 8% to reflect the decreasing price of diesel fuel.

Food Delivery

Online supermarket FreshDirect has a fuel surcharge that changes with the price of gas. But like FedEx, that surcharge hasn’t kept up with the current price of fuel. According to the company’s website, there should be no surcharge if retail gas prices fall below $3.01. Fill out an order, though, and you’ll notice FreshDirect is still charging a 38¢ fuel fee—something that should only happen if gas prices hit $3.26. FreshDirect did not immediately respond to requests for comment, but it’s safe to assume they’re based gas prices on some time in the past. That and the very low cost of the fee makes it more forgivable.

UPDATE:

FreshDirect responded, saying their fuel surcharge is based on the retail price of diesel fuel, which has not declined in price as quickly as gasoline.

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